■  ■  • 


BENDER-MOSS  CO. 

PUBLISHERS 
San  Francisco        .'.        .*.        Cal. 


THE  LIBRARY 

OF 

THE  UNIVERSITY 

OF  CALIFORNIA 

LOS  ANGELES 

SCHOOL  OF  LAW 


THE 


NEGOTIABLE  INSTRUMENTS  LAW 


From  the  Draft  prepared  for  the  Commissioners  on  Uniformity 
of  Laws,  and  Enacted  in  Alabama,  Alaska,  Arizona,  Arkansas 
Colorado,  Connecticut,  Delaware,  District  of  Columbia 
Florida,  Hawaii,  Idaho,  Illinois,  Indiana,  Iowa.  Kansas, 
Kentucky,  Louisiana,  Maryland,  Massachusetts, 
Michigan,  Minnesota,  Missouri,  Montana,  Ne- 
braska, New  Hampshire,  Nevada,  New  Jer- 
sey, New  Mexico,  New  York,    North 
Carolina,  North  Dakota,  Ohio,  Okla- 
homa,   Oregon,    Pennsylvania, 
Rhode  Island,  South  Carolina,  South  Dakota, 
Tennessee,    Utah,  Vermont,  Virginia. 
Washington,  West   Virginia, 
Wisconsin  and  Wyoming. 


THE  FULL  TEXT  OF  THE  LAW  AS  ENACTED, 
WITH  COPIOUS  ANNOTATIONS. 


BY 


JOHN  J.  CRAWFORD, 

Or  the  New  York  Bab, 
BY  WHOM  THE  STATUTE  WAS  DRAWN. 


FOURTH    EDITION. 


NEW  YORK: 

BAKER,  VOORHIS  AND  COMPANY, 

1916. 


COPYEIGHT,    1897, 

By  JOHN  J.  CRAWFORD. 

COPYEIGHT,    1902, 

By  JOHN  J.  CRAWFORD. 

Copyright,  1908, 
By  JOHN  J.  CRAWFORD. 

Copyright,  1916, 
By  JOHN  J.  CRAWFORD. 

T        , 


PREFACE  TO  FOURTH  EDITION. 


Since  the  third  edition  of  this  book  was  published 
in  1908  the  Negotiable  Instruments  Law  has  been  en- 
acted in  Alaska,  Arkansas,  Delaware,  Indiana,  Minne- 
sota,   New    Hampshire,  Oklahoma,    South    Carolina, 
South  Dakota  and  Vermont,  so  that  it  is  now  in  force 
throughout  the  United  States,  except  in  California, 
Georgia,  Maine,  Mississippi  and  Texas.     Within  the 
same  time  there  have  been  a  great  many  decisions  un- 
der the  Act,  some  of  which  are  of  great  importance. 
These  are  cited  in  the  notes  appended  to  the  various 
sections.    The  draftsman's  original  notes,  as  they  ap- 
peared in  the  draft  submitted  to  the  commissioners  on 
Uniform  Laws,  and  which  were  intended  to  indicate 
the  authority  for  the  different  provisions  of  the  stat- 
ute, have  been  retained,  and  appear,  for  the  most  part, 
under   the   headings   "  Eule    at   Common  Law  "    or 
"  Source  of  the  Section."    The  English  cases  constru- 
ing the  Bills  of  Exchange  Act  are  not  cited,  for  the  rea- 
son that,  so  far  as  they  are  important,  the  language 
which  the  English  courts  were  called  upon  to  construe, 
differs  materially  from  that  in  the  Negotiable  Instru- 
ments Law,  and  any  attempt  to  conform  to  those  deci- 
sions would  tend  to  defeat,  rather  than  to  insure,  a  uni- 
form  construction   of   the   American    statute.     That 
this  would  be  the  effect  will  appear  more  clearly  from 
the  following  statement  taken  from  an  address  de- 
livered by  the  late  Lyman  D.  Brewster,  who  was  for  a 
number  of  years  President  of  the  Conference  of  Com- 
missioners on  Uniform  Laws,  and  who  was  also  a  mem- 
ber of  the  sub-committee  under  whose  direction  the 
statute  was  prepared:    "  The  framers  of  the  English 

[in] 


686210 


IV  PREFACE   TO   FOURTH   EDITION. 

Act  had  followed  the  form  of  the  Continental  Codes, 
especially  the  French  Commercial  Code  and  the  Ger- 
man Bills  of  Exchange  Act;  that  is  to  say,  they  dealt 
primarily  with  bills  of  exchange,  and  then  applied  those 
provisions,  so  far  as  they  were  applicable,  to  promis- 
sory notes,  adding  provisions  which  were  peculiar  to 
the  latter  class  of  instruments.  The  draftsman  of  the 
American  Act  deemed  this  form  unsuitable  to  American 
conditions,  where  the  use  of  bills  of  exchange  is  not  so 
extensive  as  it  is  in  Europe,  and  where  most  of  the 
cases  relate  to  other  kinds  of  negotiable  instruments; 
and  he  adopted  a  form  of  his  own,  which  grouped  to- 
gether the  provisions  applicable  to  all  kinds  of  negoti- 
able instruments,  and  then  collected,  under  separate 
articles,  the  provisions  specially  affecting  the  different 
classes.     *     *     *     This  departure  from  the  Continen- 
tal form,  together  with  the  introduction  of  many  state- 
ments of  the  law  based  entirely  upon  the  American 
cases,  required   a  considerable   divergence  from  the 
English  Act,  and  perhaps  the  resemblance  between  the 
English  and  American  statutes  is  not  so  great  as  be- 
tween the  English  statute  and  the  German  Bills  of  Ex- 
change Act."    From  this  it  will  be  obvious  that  uni- 
formity can  be  secured  only  by  a  close  attention  to  the 
language  of  the  Act,  and  to  the  decisions  thereunder; 
and  that  a  resort  to  cases  in  which  another  statute  was 
construed  would  be  very  much  like  adopting  the  prac- 
tice which  formerly  obtained  in  will  cases,  when  the 
courts  were  too  much  disposed  to  determine  the  mean- 
ing of  one  will  by  what  had  been  decided  with  respect 
to  another  will.    But  it  is  equally  obvious  that  if  uni- 
formity is  to  be  had,  the  courts  of  each  State  must 
notice  the  decisions  made  in  other  States;  and  as  will 
be  seen  by  a  reference  to  the  cases  cited  on  pages  3,  4 


PREFACE   TO   FOURTH    EDITION.  Y 

and  5,  the  necessity  for  this  has  been  generally  recog- 
nized. 

In  the  draft  as  originally  prepared,  and  as  submitted 
by  the  commissioners  to  the  legislatures  of  the  States, 
the  act  was  divided  into  four  titles  as  follows:  1. 
Negotiable  Instruments  in  General;  2.  Bills  of  Ex- 
change; 3.  Promissory  Notes  and  Checks,  and  4.  Gen- 
eral Provisions;  and  this  arrangement  has  been  pre- 
served in  many  of  the  States.  But  in  other  States,  as 
for  example  in  New  York,  the  titles  were  omitted, 
and  this,  of  course,  necessitated  a  renumbering  of  the 
articles.  In  some  States,  where  the  act  has  been  car- 
ried into  a  revision  of  the  statutes,  the  articles  have 
been  dispensed  with.  The  sequence  of  the  sections  is 
the  same  in  all  of  the  States,  except  that  in  some  States, 
as  in  New  York,  the  general  provisions  have  been 
placed  at  the  beginning,  while  in  most  of  the  States 
these  sections  are  put  at  the  end.  The  section  numbers 
vary  greatly,  but  the  number  of  any  section  as  it  is  in 
any  State,  can  be  readily  found  by  referring  to  the 
table  of  corresponding  sections  on  pagexiii.  Under 
the  heading  ' '  variant  readings  ' '  the  changes  made  in 
the  statute  in  the  different  States  are  indicated.  These, 
it  will  be  observed,  are  not  important,  except  in  the 
States  of  Illinois  and  Wisconsin. 

JOHN  J.  CRAWFORD. 

30  Broad  Street,  New  York,  December  1st,  1915. 


PREFACE  TO  THIRD  EDITION. 


Since  the  second  edition  of  this  book  was  published 
in  1902,  the  Negotiable  Instruments  Law  has  been  en- 
acted in  the  following  States,  viz. :  Alabama,  Arizona, 
Idaho,  Illinois,  Iowa,  Kansas,  Kentucky,  Louisiana, 
Michigan,  Missouri,  Montana,  Nebraska,  Nevada,  New 
Jersey,  New  Mexico,  Ohio,  West  Virginia  and  Wyom- 
ing. In  all  but  one  of  these,  the  language  of  the  Act 
is  the  same  as  that  in  the  New  York  statute,  except  in 
a  few  minor  and  unimportant  particulars.  The  Illinois 
statute,  however,  contains  some  provisions  materially 
different.  These  consist  mainly  of  proposed  amend- 
ments submitted  to  the  Commissioners  on  Uniformity 
of  Laws  at  their  annual  meeting  in  1900,  but  which  the 
Commissioners,  by  a  unanimous  vote,  after  a  full  re- 
port from  a  committee  appointed  to  consider  the  sub- 
ject, rejected  as  undesirable.  In  the  six  years  that 
have  elapsed  since  the  publication  of  the  second  edi- 
tion, the  statute  has  been  applied  or  construed  in  more 
than  two  hundred  cases.  All  of  these  are  cited  in  the 
present  edition.  The  number  of  the  sections  vary  in 
the  different  States,  and  for  convenience  of  reference 
a  table  of  corresponding  sections  has  been  added. 

JOHN  J.  CRAWFORD. 

30  Broad  Street,  New  York,  June  10,  1908. 

Lvii] 


PREFACE  TO  SECOND  EDITION. 


When  the  first  edition  of  this  book  was  published, 
the  Negotiable  Instruments  Law  had  been  passed  in 
four  States,  viz. :  New  York,  Connecticut,  Florida  and 
Colorado.  In  the  four  years  which  have  elapsed  since 
then  it  has  been  enacted  in  Massachusetts,  Rhode 
Island,  Pennsylvania,  Maryland,  Virginia,  North  Caro- 
lina, Tennessee,  Wisconsin,  North  Dakota,  Utah,  Ore- 
gon and  Washington,  and  has  also  been  adopted  by 
Congress  as  the  law  of  the  District  of  Columbia.  In 
most  instances  the  law  has  been  passed  in  the  form 
proposed  by  the  Commissioners  on  Uniformity  of 
Laws;  but  in  several  States  a  few  minor  changes  have 
been  made.  These  are  indicated  in  the  notes  to  this 
edition.  I  have  also  endeavored  to  point  out  the 
changes  made  by  the  law  in  the  different  States,  and 
have  added  to  the  notes  citations  to  the  decisions  in  all 
the  States  where  the  statute  is  now  in  force.  It  is 
somewhat  notable  that  so  few  cases  have  arisen  under 
the  Act.  The  reported  cases  number  only  about  a  half 
dozen  in  all;  and  in  most  of  these  the  court  was  re- 
quired only  to  apply  the  act,  and  not  to  construe  it. 
Perhaps  nothing  could  better  demonstrate  that  the 
practical  working  of  the  law  has  been  satisfactory.  As 
in  the  previous  edition,  the  text  is  that  of  the  New 
York  Act.  For  the  information  of  the  profession  oat- 
side  of  New  York  it  may  be  stated  that  the  hiatus  in 
the  section  numbers  does  not  indicate  the  omission  of 
any  sections,  but  is  in  accordance  with  the  plan 
adopted  in  all  the  "  General  Laws  "  of  this  State. 

JOHN  J.  CRAWFORD. 

30  Broad  Street,  New  York,  February  1,  1902. 


PREFACE  TO  FIRST  EDITION. 


•In  1895  the  Conference  of  Commissioners  on  Uni- 
formity of  Laws,  which  met  that  year  in  Detroit,  in- 
structed the  Committee  on  Commercial  Law  to  have 
prepared  a  codification  of  the  law  relating  to  bills  and 
notes.  The  matter  was  referred  to  a  sub-committee 
consisting  of  Lyman  D.  Brewster  of  Connecticut, 
Henry  C.  Wilcox  of  New  York  and  Frank  Bergen  of 
New  Jersey;  and  I  was  employed  by  the  sub-committee 
to  draw  the  proposed  law.  When  completed,  the  draft, 
with  my  notes,  was  submitted  to  the  sub-committee, 
who  printed  it  and  sent  copies  to  each  member  of  the 
conference,  and  also  to  many  prominent  lawyers  and 
law  professors,  and  to  several  English  judges  and  law- 
yers, with  an  invitation  for  suggestions  and  criticisms. 
The  draft  was  submitted  to  the  conference  which  met 
at  Saratoga  in  August,  1896;  and  the  Commissioners 
who  were  in  attendance,  being  twenty-seen  in  all,  and 
representing  fourteen  different  States,  went  over  it 
section  by  section,  and  made  some  amendments 
therein,  most  of  which  were  such  changes  in  the  exist- 
ing law  as  I  had  not  felt  at  liberty  to  incorporate  into 
the  original  draft.  The  draft  as  thus  amended  was 
adopted  by  the  conference;  and  in  such  form  it  has 
been  submitted  to  the  legislatures  of  many  of  the 
States.  It  has  been  passed  and  has  become  a  law  in 
New  York,  Connecticut,  Colorado  and  Florida.  I  am 
informed  that  the  Commissioners  on  Uniformity  of 
Laws  will  make  special  effort  to  have  it  adopted  in 
many  other  States  at  the  next  session  of  their  legisla- 
tures. 

[xi] 


Xll  PREFACE   TO   FIRST   EDITION. 

The  text  of  the  law  as  printed  in  this  edition  is  that 
of  the  New  York  statute.  This  is  precisely  the  same 
as  that  of  the  draft  published  by  the  Commissioners 
on  Uniformity  of  Laws,  and  the  statute  as  passed  in 
Connecticut,  Colorado  and  Florida,  except  that  the  sec- 
tion numbers  have  been  changed,  and  section  headings 
introduced,  to  conform  the  statute  to  the  plan  adopted 
by  the  Commissipners  of  Statutory  Revision  in  their 
revision  of  the  General  Laws,  and  three  sections,  viz., 
330,  331  and  332,  relating  to  special  matters  heretofore 
embodied  in  other  New  York  statutes,  have  been 
added. 

In  the  course  of  the  passage  of  the  bill  through  the 
New  York  Legislature  a  number  of  errors  were  made 
in  the  engrossing  and  were  not  detected  until  too  late 
to  be  corrected.  I  have  indicated  these  by  asterisks 
and  foot-notes.  Probably  none  of  them  are  of  such  a 
character  as  to  effect  the  meaning,  since  they  are  so 
obviously  mistakes. 

In  submitting  this  edition  of  the  statute  to  the  pub- 
lic, I  embrace  this  my  first  opportunity  to  publicly  ex- 
press my  appreciation  of  the  unvarying  courtesy  and 
consideration  shown  me  by  the  Commissioners  on  Uni- 
formity of  Laws,  and  especially  by  those  composing 
the  sub-committee  having  the  preparation  of  the  bill 
in  charge. 

JOHN  J.  CRAWFORD. 

30  Broad  Street,  New  York,  July  8,  1897. 


TABLE  OF  CORRESPONDING    SECTIONS.* 


Com- 

mis- 
sioners' 

Ala. 

Ariz. 

Col. 

Conn. 

Fla. 

Ida. 

111. 

Ind. 

Kan. 

Draft 

1 

495S 

3304 

5051 

4171 

2935 

3458 

1 

9089a 

5247 

2 

4959 

3305 

5052 

4172 

2936 

3459 

2 

9089b 

5248 

3 

4960 

3306 

5053 

4173 

2937 

3460 

3 

9089c 

5249 

4 

4961 

3307 

5054 

4174 

f 29381 

\2939J 

3461 

4 

90S9d 

5250 

5 

4962 

330S 

5055 

4175 

2939 

3462 

5 

90S9e 

5251 

6 

4963 

3309 

5056 

4176 

2940 

3463 

6 

9089f 

5252 

7 

4964 

3310 

5057 

4177 

2941 

3464 

7 

9089g 

5253 

8 

4965 

3311 

5058 

4178 

2942 

3465 

8 

9089h 

5254 

9 

4966 

3312 

5059 

4179 

2943 

3466 

9 

9089i 

5255 

10 

4967 

3313 

5060 

4180 

2944 

3467 

10 

90S9J 

5256 

11 

4968 

3314 

5061 

4181 

2945 

3468 

11 

9089k 

5257 

12 

4969 

3315 

50(2 

4182 

2946 

3469 

12 

90891 

5258 

13 

4970 

3316 

5063 

4183 

2947 

3470 

13 

9089m 

5259 

14 

4971 

3317 

5064 

4184 

2948 

3471 

14 

9089n 

5260 

15 

4972 

331S 

5065 

4185 

2949 

3472 

15 

9089o 

5261 

16 

4973 

3319 

5066 

4186 

2950 

3473 

16 

90S9p 

5262 

17 

4974 

3:^20 

5067 

4187 

2951 

3474 

17 

9089q 

5263 

18 

4975 

3321 

5068 

4188 

2952 

3475 

18 

9089r 

5264 

19 

4976 

3322 

5069 

4189 

2953 

3476 

19 

9089s 

5265 

20 

4977 

3323 

5070 

4190 

2954 

3477 

20 

9089t 

5266 

21 

4978 

3324 

5071 

4191 

2955 

3478 

21 

9089u 

5267 

22 

4979 

2325 

5072 

4192 

2956 

3479 

22 

9089v 

5268 

23 

4980 

2326 

5073 

4193 

2957 

3480 

23 

9089w 

5269 

24 

4981 

2327 

5074 

4194 

2958 

3481 

24 

9089x 

5270 

25 

4982 

2328 

5075 

4195 

2959 

3482 

25 

9089y 

5271 

26 

4982 

2329 

5076 

4196 

2960 

3483 

26 

9089z 

5272 

27 

4982 

2330 

5077 

4197 

2961 

3484 

27 

9089al 

5273 

28 

4983 

3331 

5078 

4198 

2962 

3485 

28 

90S9bl 

.5274 

29 

4984 

3332 

5079 

4199 

2963 

3486 

29 

90S9cl 

5275 

30 

4985 

3333 

5080 

4200 

2964 

3487 

30 

9089dl 

5276 

31 

4986 

3334 

5081 

4201 

2965 

3488 

31 

9089el 

5277 

32 

4987 

3335 

5082 

4202 

2966 

3489 

32 

90S9fl 

5278 

33 

4988 

3336 

5083 

4203 

2967 

3490 

33 

9089gl 

5279 

34 

4989 

3337 

5084 

4204 

2968 

3491 

34 

90S9hl 

5280 

35 

4990 

3338 

5085 

4205 

2969 

3492 

35 

90S9il 

5281 

36 

4991 

3339 

5086 

4206 

2970 

3493 

36 

9089 jl 

5282 

37 

4992 

3340 

5087 

4207 

2971 

3494 

37 

9089k 1 

5283 

38 

4993 

3341 

5088 

4208 

2972 

3495 

38 

908911 

5284 

39 

4994 

3342 

5089 

4209 

2973 

3496 

39 

9089ml 

5285 

40 

4995 

3343 

5090 

4210 

2974 

3497 

40 

9089nl 

5286 

41 

4996 

3344 

5091 

4211 

2975 

3498 

41 

9089ol 

5287 

42 

4997 

3345 

5092 

4212 

2976 

3499 

42 

90S9pl 

5288 

43 

4998 

3346 

5093 

4213 

2977 

3500 

43 

9089ql 

5289 

For  the  numbers  in  other  States,  see  pages  xvii-xx  and  xxi-xxiv. 

[xiii] 


XIV 


TABLE   OF   CORRESPONDING   SECTIONS.* 


Com- 

mis- 
sioners' 
Draft 

Ala. 

Ariz. 

Col. 

Conn. 

Fla. 

Ida. 

111. 

Ind. 

Kan. 

44 

49CQ 

3347 

5094 

4214 

2978 

3501 

44 

9089rl 

5290 

45 

5000 

3348 

■  >  •  • 

4215 

2979 

3502 

45 

9089sl 

5291 

46 

5001 

3349 

5096 

4216 

2979 

3503 

46 

9089U 

5292 

47 

5002 

3350 

5097 

4217 

2980 

3504 

47 

9089ul 

5293 

48 

5003 

3351 

5098 

4218 

2981 

3505 

48 

9089vl 

5294 

49 

5004 

3352 

5099 

4219 

2982 

3506 

49 

9089wl 

5295 

50 

5005 

3353 

5100 

4220 

2983 

3507 

50 

9089x1 

5296 

51 

5006 

3354 

5101 

4221 

2984 

3508 

51 

9089yl 

5297 

52 

5007 

3355 

5102 

4222 

2985 

3509 

52 

9089zl 

5298 

53 

5008 

3356 

5103 

4223 

2986 

3510 

53 

9089a2 

5299 

54 

5009 

3357 

5104 

4224 

2987 

3511 

54 

9089b2 

5300 

55 

5010 

3358 

5105 

4225 

2988 

3512 

55 

9089c2 

5301 

56 

5011 

3359 

5106 

4226 

2989 

3513 

56 

9089d2 

5302 

57 

5012 

3360 

5107 

4227 

2990 

3514 

57 

9089e2 

5303 

58 

5013 

3361 

5108 

4228 

2991 

3515 

58 

9089f2 

5304 

59 

5014 

3362 

5109 

4229 

2992 

3516 

59 

9089g2 

5305 

60 

5015 

3363 

5110 

4230 

2993 

3517 

60 

9089h2 

5306 

61 

5016 

3364 

5111 

4231 

2994 

3518 

61 

9089i2 

5307 

62 

5017 

3365 

5112 

4232 

2995 

3519 

62 

9089J2 

5308 

63 

5018 

3366 

5113 

4233 

2996 

3520 

63 

9089k2 

5309 

64 

5019 

3367 

5114 

4234 

2997 

3521 

64 

908912 

5310 

65 

5020 

3368 

5115 

4235 

2998 

3522 

65 

9089m2 

5311 

66 

5021 

3369 

5116 

4236 

2999 

3523 

66 

9089n2 

5312 

67 

5022 

3370 

5117 

4237 

3000 

3524 

67 

9089o2 

5313 

68 

5023 

3371 

5118 

4238 

3001 

3525 

68 

9089p2 

5314 

69 

5024 

3372 

5119 

4239 

3002 

3526 

69 

9089q2 

5315 

70 

5025 

3373 

5120 

4240 

3003 

3527 

70 

9089r2 

5316 

71 

5026 

3374 

5121 

4241 

3004 

3528 

71 

9089s2 

5317 

72 

5027 

3375 

5122 

4242 

3005 

3529 

72 

9089t2 

5318 

73 

5028 

3376 

5123 

4243 

3006 

3530 

73 

9089u2 

5319 

74 

5029 

3377 

5124 

4244 

3007 

3531 

74 

9089v2 

5320 

75 

5030 

3378 

5125 

4245 

3008 

3532 

75 

9089w2 

5321 

76 

5031 

3379 

5126 

4246 

3009 

3533 

76 

9089x2 

5322 

77 

5032 

3380 

5127 

4247 

3010 

3534 

77 

9089y2 

5323 

78 

5033 

3381 

5128 

4248 

3011 

3535 

78 

9089z2 

5324 

79 

5034 

3382 

5129 

4249 

3012 

3536 

79 

9089a3 

5325 

80 

5035 

3383 

5130 

4250 

3012 

3537 

80 

9089b3 

5326 

81 

5036 

3384 

5131 

4251 

3013 

3538 

81 

9089c3 

5327 

82 

5037 

3385 

5132 

4252 

3014 

3539 

82 

9089d3 

5328 

83 

5038 

3386 

5133 

4253 

3015 

3540 

83 

9089e3 

5329 

84 

5038 

3387 

5134 

4254 

3016 

3541 

84 

9089f3 

5330 

85 

5039 

3388 

5135 

4255 

3017 

3542 

85 

9089g3 

5331 

86 

5040 

3389 

5136 

4256 

3017 

3543 

86 

9089h3 

5332 

87 

5041 

3390 

5137 

4257 

3018 

3544 

B 

9089i3 

5333 

88 

5042 

3391 

5138 

4258 

3019 

3545 

87 

9089J3 

5334 

89 

5043 

3392 

5139 

4259 

3020 

3546 

88 

9089k3 

5335 

90 

5044 

3393 

5140 

4260 

3021 

3547 

89 

908913 

5336 

91 

5045 

3394 

5141 

4261 

3022 

3548 

90 

9089m3 

5337 

92 

5046 

3395 

5142 

4262 

3023 

3549 

91 

9089n3 

5338 

93 

5046 

3396 

5143 

4263 

3024 

3550 

92 

9089o3 

5339 

94 

5047 

3397 

5144 

4264 

3025 

3551 

93 

9089p3 

5340 

For  the  numbers  in  other  States,  see  pages  xvii-xx  and  xxi-xxiv. 


TABLE   OF   CORRESPONDING    SECTIONS.* 


XV 


-     = 
Com- 

 3 

mis- 
si r»npr9 

Ala. 

Ariz. 

Col. 

Conn. 

Fla. 

Ida. 

111. 

Ind. 

Kan. 

■31  UUljlO 

Draft 

95 

5048 

3398 

5145 

4265 

3026 

3552 

91 

9089q3 

5341 

96 

5048 

;;  199 

5146 

42613 

3027 

3553 

95 

9089r3 

5342 

97 

5049 

3io;) 

5147 

4l>07 

3027 

3554 

96 

9089s3 

5343 

98 

5050 

3401 

5148 

4268 

3028 

3555 

97 

9089t3 

5344 

99 

5051 

3402 

5149 

4269 

3029 

3556 

98 

9089u3 

5345 

100 

5052 

3403 

5150 

4270 

3029 

3557 

99 

9089v3 

5346 

101 

5053 

3404 

5151 

4271 

3030 

3558 

100 

9089w3 

5347 

102 

5054 

3405 

5152 

4272 

3031 

3559 

101 

9089x3 

5348 

103 

5055 

3406 

5153 

4273 

3031 

3560 

102 

9089y3 

5349 

104 

5056 

3407 

5154 

4274 

3032 

3561 

103 

9089z3 

5350 

105 

5057 

3408 

5155 

4275 

3033 

3562 

104 

9089a4 

5351 

106 

5057 

3409 

5155 

4276 

3033 

3563 

105 

9089b4 

5352 

107 

5058 

3410 

5157 

4277 

3034 

3564 

106 

9089c4 

5353 

108 

5059 

3411 

5158 

4278 

3035 

3565 

107 

9089d4 

5354 

109 

5060 

3412 

5159 

4279 

3036 

3566 

108 

9089e4 

5355 

110 

5060 

3413 

5160 

4280 

3036 

3567 

109 

90S!  HI 

5356 

111 

5060 

3414 

5161 

4281 

3036 

3568 

110 

90S9£$4 

5357 

112 

5061 

3415 

5162 

4282 

3037 

3569 

111 

90S9H4 

5358 

113 

5062 

3416 

5163 

4283 

3038 

3570 

112 

9089i4 

5359 

114 

5063 

3417 

5164 

4284 

3039 

3571 

113 

9089J4 

5360 

115 

5064 

3418 

5165 

4285 

3039 

3572 

114 

9089k4 

5361 

116 

5065 

3419 

5166 

4286 

3039 

3573 

115 

908914 

5362 

117 

5066 

3420 

5167 

4287 

3040 

3574 

116 

90S9m4 

5363 

118 

5067 

3421 

5168 

4288 

3041 

3575 

117 

9089n4 

5364 

119 

5068 

3422 

5169 

4289 

3042 

3576 

118 

9089o4 

5365 

120 

5069 

3423 

5170 

4290 

3042 

3577 

119 

9089p4 

5366 

121 

5070 

3424 

5171 

4291 

3043 

357S 

120 

90S9q4 

5367 

122 

5071 

3425 

5172 

4292 

3044 

3579 

121 

9089r4 

5368 

123 

5072 

3426 

5173 

4293 

3045 

3580 

122 

9089s4 

5369 

124 

5073 

3427 

5174 

4294 

3046 

3581 

123 

9089t4 

5370 

125 

5074 

3428 

5175 

4295 

3046 

3582 

124 

90S9u4 

5371 

126 

5075 

3429 

5176 

4296 

3047 

3583 

125 

9089v4 

5372 

127 

5076 

3430 

5177 

4297 

3047 

3584 

126 

9089w4 

5373 

128 

5077 

3431 

5178 

4298 

3047 

3585 

127 

9089x4 

5374 

129 

5078 

3432 

5179 

4299 

3048 

3586 

128 

90S9y4 

5375 

130 

5079 

3433 

51S0 

4300 

3049 

3587 

129 

9089z4 

5376 

131 

5080 

3434 

5181 

4301 

3050 

3588 

130 

9089a5 

5377 

132 

5081 

3435 

51S2 

4302 

3051 

3589 

131 

9089b5 

5378 

133 

5082 

3436 

5183 

4303 

3051 

3590 

132 

9089c5 

5379 

134 

5083 

3437 

5184 

4304 

3051 

3591 

133 

9089d5 

5380 

135 

5084 

3438 

5185 

4305 

3052 

3592 

134 

9089e5 

5381 

136 

5085 

3439 

51S6 

4306 

3053 

3593 

135 

9089f5 

5382 

137 

5086 

3440 

5 1ST 

4307 

3054 

3594 

136 

9089s5 

5383 

138 

5087 

3441 

5188 

4308 

3055 

3595 

9089h5 

5384 

139 

5088 

3442 

5189 

4309 

3056 

3596 

i38 

9089i5 

5385 

140 

50X0 

3443 

5190 

4310 

3056 

3597 

139 

9089  j  5 

5386 

141 

5090 

3444 

5191 

4311 

3056 

3598 

140 

9089k 5 

5387 

142 

5091 

3445 

5192 

4312 

3057 

3599 

141 

908'.  115 

5388 

143 

5092 

3446 

5193 

4313 

3058 

3600 

142 

90S9m5 

5389 

144 

5093 

3447 

5194 

4314 

3059 

3601 

143 

9089n5 

5390 

145 

5094 

3448 

5195 

4315 

3060 

3602 

144 

9085o5 

5391 

146 

5095 

3449 

5196 

4310 

3061 

3603 

145 

91  »S9p5 

5392 

For  the  numbers  in  other  States,  see  pages  xvii-xx  and  xxi-xxiv. 


XVI 


TABLE   OF   CORRESPONDING   SECTIONS.' 


Com-  j 

! 

| 

* 

mis- 

Ala. 

Ariz.  | 

Col.  ! 

Conn. 

Fla. 

Ida. 

111. 

Ind. 

Kan. 

□  11  mm  i  ^   | 

Draft 

1 

147 

5095 

3450 

i 
5197 

4317 

1 

3062 

3604 

146 

9089q5 

5393 

148 

5095 

3451 

5198 

4318 

3062 

3605 

147 

9089r5 

5394 

149 

5097 

3452 

5199 

4319 

3063 

3606 

148 

9089s5 

5395 

150 

5098 

3453 

5200 

4320 

3063 

3607 

149 

9089t5 

5396 

151 

5099 

3454 

5201 

4321 

3064 

3608 

150 

9089u5 

5397 

152 

5100 

3455 

5203 

4322 

3065 

3609 

151 

9089v5 

5398 

153 

5101 

3456 

5204 

4323 

3066 

3610 

152 

9089w5 

5399 

154 

5102 

3457 

5205 

4324 

3066 

3611 

153 

9089x5 

5400 

155 

5103 

3458 

5206 

4325 

3067 

3612 

154 

9089v5 

5401 

156 

5104 

3459  | 

5207 

4326 

3067 

3613 

155 

9089z5 

5402 

157 

5105 

3460 

5208 

4327 

3008 

3614 

156 

9089a6 

5403 

158 

5106 

3461 

5209 

4328 

3069 

3615 

157 

90S9b6 

5404 

159 

5107 

3462 

5210 

4329 

3070 

3616 

158 

9089c6 

5405 

160 

5108 

3463 

5211 

4330 

3071 

3617 

159 

9089d6 

5406 

161 

5109 

3464 

5212 

4331 

3073 

3618 

160 

9089e6 

5407 

162 

5110 

3465 

5213 

4332 

3074 

3619 

161 

9089f6 

5408 

163 

5111 

3466 

5214 

4333 

3075 

3620 

162 

9089g6 

5409 

164 

5112 

3467 

5215 

4334 

3076 

3621 

163 

9089h6 

5410 

165 

5113 

3468 

5216 

4335 

3076 

3622 

164 

9089i6 

5411 

166 

5114 

3469 

5217 

4336 

3077 

3623 

165 

9089  j  6 

5412 

167 

5115 

3470 

5218 

4337 

3078 

3624 

166 

9089k6 

5413 

168 

5116 

3471 

5219 

4338 

3079 

3625 

167 

908916 

5414 

169 

5117 

3472 

5220 

4339 

3080 

3626 

168 

9089m6 

5415 

170 

5118 

3173 

5221 

4340 

3081 

3027 

169 

9089n6 

5416 

171 

5119 

3474 

5221 

4341 

3082 

3628 

170 

90S9o6 

5417 

172 

5120 

3475 

5222 

4342 

3082 

3629 

171 

9089p6 

5418 

173 

5120 

3476 

5223 

4343 

3083 

3630 

172 

9089q6 

5419 

174 

5121 

3477 

5224 

4344 

3084 

3631 

173 

90S9r6 

4920 

175 

5122 

3478 

5225 

4345 

3085 

3632 

174 

90S9s6 

4921 

176 

5123 

3479 

5226 

4346 

3086 

3633 

175 

9089t6 

5422 

177 

5124 

3480 

5227 

4347 

30S6 

3634 

176 

90S9u6 

5423 

178 

5125 

3481 

5228 

4348 

3087 

3635 

177 

9089v6 

5424 

179 

5126 

3482 

5229 

4349 

3088 

3636 

178 

90S9\v0 

5425 

180 

5127 

3483 

5230 

4350 

3089 

3637 

179 

9089x6 

5426 

181 

5128 

3484 

5231 

4351 

3090 

3638 

180 

9089y6 

5427 

182 

5129 

3485 

5232 

4352 

3091 

3639 

181 

9089z6 

5428 

183 

5130 

3486 

5233 

4353 

3092 

3640 

182 

90S9a7 

5429 

184 

5031 

3487 

5234 

4354 

3093 

3641 

183 

9089b7 

5430 

185 

5032 

3487 

5235 

4355 

3094 

3642 

184 

9089c7 

5431 

186 

5033 

3487 

5236 

4356 

3095 

3643 

185 

9089d7 

5432 

187 

5034 

3487 

5237 

4357 

3096 

3644 

186 

9089e7 

5433 

188 

5035 

3487 

5238 

4358 

3097 

3645 

187 

9089f7 

5434 

189 

5036 

34S7 

5239 

4359 

3098 

3646 

188 

9089g7 

5435 

190 

5037 

5240 

2934 

3647 

189 

9089h7 

5436 

191 

5038 

3487 

5241 

4i70 

2934 

3648 

190 

9089i7 

5437 

192 

5039 

34S8 

5242 

4170 

2934 

3649 

191 

9089  j  7 

5438 

193 

5040 

3489 

5243 

4170 

2934 

3650 

192 

9089k7 

5439 

194 

5041 

3490 

5244 

4170 

2934 

3651 

193 

908917 

5440 

195 

5042 

5245 

4170 

3652 

194 

9089m7 

5441 

196 

5043 

349i 

5246 

4170 

2934 

3653 

195 

9089n7 

5442 

197 

•  •  •  ■ 

•  •  •  • 

.... 

.... 

.... 

.... 

196 



.... 

198 
c 



.... 

■"3 

For  tbe  numbers  in  other  States,  see  pages  xvii-xx  and  xxi-xxiv. 


TABLE   OF   CORRESPONDING    SECTIONS.* 


XV11 


Com- 

mis- 
sioners' 

Md. 

Mass. 

Mich. 

Minn. 

Mon. 

Neb. 

N.H. 

N.  Y. 

N.  C. 

Draft 

1 

20 

18 

3 

5813 

5849 

1 

1 

20 

2151 

2 

21 

19 

4 

5814 

5S50 

2 

2 

21 

2152 

3 

22 

20 

5 

5815 

5851 

3 

3 

22 

2153 

4 

23 

21 

6 

5816 

5852 

4 

4 

23 

2154 

5 

24 

22 

7 

5817 

5853 

5 

5 

24 

2155 

6 

25 

23 

8 

5818 

5854 

6 

6 

25 

2156 

7 

26 

24 

9 

5819 

5855 

7 

7 

26 

2157 

8 

27 

25 

10 

5820 

5856 

8 

8 

27 

2158 

9 

28 

26 

11 

5821 

5857 

9 

9 

28 

2159 

10 

29 

27 

12 

5822 

5858 

10 

10 

29 

2100 

11 

30 

28 

13 

5S23 

5859 

11 

11 

30 

2161 

12 

31 

29 

14 

5824 

5860 

12 

12 

31 

2162 

13 

32 

30 

15 

5825 

5861 

13 

13 

32 

2163 

14 

33 

31 

16 

5826 

5862 

14 

14 

33 

2164 

15 

34 

32 

17 

5827 

5863 

15 

15 

34 

2165 

16 

35 

33 

18 

5828 

5864 

16 

16 

35 

2166 

17 

36 

34 

19 

5S29 

5865 

17 

17 

36 

2341 

18 

37 

35 

20 

5830 

5866 

18 

18 

37 

2167 

19 

38 

36 

21 

5831 

5867 

19 

19 

38 

2168 

20 

39 

37 

22 

5832 

5S68 

20 

20 

39 

2169 

21 

40 

38 

23 

5833 

5869 

21 

21 

40 

2170 

22 

41 

39 

24 

5834 

5S70 

22 

22 

41 

2180 

23 

42 

40 

25 

5835 

5871 

23 

23 

42 

2171 

24 

43 

41 

26 

5836 

5872 

24 

24 

50 

2172 

25 

44 

42 

27 

5837 

5873 

25 

25 

51 

2173 

26 

45 

43 

28 

5838 

5874 

26 

26 

52 

2174 

27 

46 

44 

29 

5839 

5875 

27 

27 

53 

2175 

28 

47 

45 

30 

5840 

5876 

28 

28 

54 

2176 

29 

48 

46 

31 

5841 

5S77 

29 

29 

55 

2177 

30 

49 

47 

32 

5842 

5878 

30 

30 

60 

2178 

31 

50 

48 

33 

5843 

5879 

31 

31 

61 

2179 

32 

51 

49 

34 

5S44 

5880 

32 

32 

62 

2181 

33 

52 

50 

35 

5845 

5881 

33 

33 

63 

2182 

34 

53 

51 

36 

5846 

5882 

34 

34 

64 

2183 

35 

54 

52 

37 

5847 

5883 

35 

35 

65 

2184 

36 

55 

53 

38 

5848 

5884 

36 

36 

66 

2185 

37 

56 

54 

39 

5849 

5885 

37 

37 

67 

2186 

38 

57 

55 

40 

5850 

5886 

38 

38 

68 

21S7 

39 

58 

56 

41 

5851 

5887 

39 

39 

69 

2188 

40 

59 

57 

42 

5852 

5888 

40 

40 

70 

2189 

41 

60 

58 

43 

5853 

5889 

41 

41 

71 

2190 

42 

61 

59 

44 

5854 

5890 

42 

42 

72 

2191 

43 

62 

60 

45 

5855 

5891 

43 

43 

73 

2192 

44 

63 

61 

46 

5856 

5892 

44 

44 

74 

2193 

45 

64 

62 

47 

5857 

5893 

45 

45 

75 

2194 

46 

65 

63 

48 

5858 

5894 

46 

46 

76 

2195 

47 

66 

64 

49 

5859 

5895 

47 

47 

77 

2196 

48 

67 

65 

50 

5860 

5896 

48 

48 

78 

2197 

49 

68 

66 

51 

5861  ' 

5897 

49 

49 

79 

2198 

50 

69  J 

67 

52 

5862  i 

5898 

50 

50 

80  1 

2199 

For  the  numbers  in  other  States,  see  pages  xiii-xvi  and  xxi-xxiv. 


XVlil  TABLE   OF  CORRESPONDING   SECTIONS.' 


Com- 

 ; 

mis- 
sioners' 

Md. 

Mass. 

Mich. 

Minn 

Mon. 

Neb. 

N.H. 

N.  Y. 

N.  C. 

Draft 

51 

70 

68 

53 

5863 

5899 

51 

51 

90 

2200 

52 

71 

69 

51 

5864 

5900 

52 

52 

91 

2201 

53 

72 

70 

55 

5865 

5901 

53 

53 

92 

2202 

54 

73 

71 

56 

5866 

5902 

54 

54 

93 

2203 

55 

74 

72 

57 

5867 

5903 

55 

55 

94 

2204 

56 

75 

73 

58 

5868 

5904 

50 

56 

95 

2205 

57 

76 

74 

59 

5869 

5905 

57 

57 

96 

2206 

58 

77 

75 

60 

5870 

5906 

58 

58 

97 

2207 

59 

78 

76 

61 

5871 

5907 

59 

59 

98 

2208 

60 

79 

77 

62 

5872 

5908 

60 

60 

110 

2209 

61 

80 

78 

63 

5873 

5909 

61 

61 

111 

2210 

.   62 

81 

79 

64 

5874 

5910 

62 

62 

112 

2211 

63 

82 

80 

65 

5875 

5911 

63 

63 

113 

2212 

64 

83 

81 

66 

5876 

5912 

64 

64 

114 

2213 

65 

84 

82 

67 

5877 

5913 

65 

65 

115 

2214 

66 

85 

83 

68 

5878 

5914 

66 

66 

116 

2215 

67 

86 

84 

69 

5879 

5915 

67 

67 

117 

2216 

68 

87 

85 

70 

5880 

5916 

68 

68 

118 

2217 

69 

88 

86 

71 

5881 

5917 

69 

69 

119 

2218 

70 

89 

87 

72 

5882 

5918 

70 

70 

130 

2219 

71 

90 

88 

73 

5883 

5919 

71 

71 

131 

2220 

72 

91 

89 

74 

5SS4 

5920 

72 

72 

132 

2221 

73 

92 

90 

75 

5885 

5921 

73 

73 

133 

2222 

74 

93 

91 

76 

5886 

5922 

74 

74 

134 

2223 

75 

94 

92 

77 

5887 

5923 

75 

75 

135 

2224 

76 

95 

93 

78 

5888 

5924 

76 

76 

136 

2225 

77 

96 

94 

79 

5889 

5925 

77 

77 

137 

2226 

78 

97 

95 

80 

5890 

5926 

78 

78 

138 

2227 

79 

98 

96 

81 

5891 

5927 

79 

79 

139 

2228 

80 

99 

97 

82 

5892 

5928 

80 

80 

140 

2229 

81 

100 

98 

83 

5893 

5929 

81 

81 

141 

2230 

82 

101 

99 

84 

5894 

5930 

82 

82 

142 

2231 

83 

102 

100 

85 

5895 

5931 

83 

83 

143 

2232 

84 

103 

101 

86 

5896 

5932 

84 

84 

144 

2233 

85 

104 

102 

87 

5897 

5933 

85 

85 

145 

2234 

86 

105 

103 

88 

5898 

5934 

86 

86 

146 

2236 

87 

106 

104 

89 

5S99 

5935 

#  # 

87 

147 

2237 

88 

107 

105 

90 

5900 

5936 

87 

88 

148 

2238 

89 

108 

106 

91 

5901 

5937 

88 

89 

160 

2239 

90 

109 

107 

92 

5902 

5938 

89 

90 

161 

2240 

91 

110 

108 

93 

5903 

5939 

90 

91 

162 

2241 

92 

111 

109 

94 

5904 

5940 

91 

92 

163 

2242 

93 

112 

110 

95 

5905 

5941 

92 

93 

164 

2243 

94 

113 

111 

96 

5906 

5942 

93 

94 

165 

2244 

95 

114 

112 

97 

5907 

5943 

94 

95 

166 

2245 

96 

115 

113 

98 

5908 

5944 

95 

96 

167 

2246 

97 

116 

114 

99 

5909 

5945 

96 

97 

168 

2247 

98 

117 

115 

100 

5910 

5946 

97 

98 

169 

2248 

99 

118 

116 

101 

5911 

5947 

98 

99 

170 

2249 

100  J 

119 

117 

102 

5912 

5948 

99 

100  J 

171 

2250 

For  the  numbers  in  other  States,  see  pages  xiii-xvi  and  xxi-xxiv. 


TABLE   OF   CORRESPONDING   SECTIONS.* 


XIX 


E : 

Com- 

 is 

mis- 
sioners' 
Draft 

Md. 

Mass. 

Mich. 

Minn. 

Mon. 

Neb. 

N.H. 

N.  Y. 

N.  C. 

101 

120 

118 

103 

5913 

5949 

100 

101 

172 

2251 

102 

121 

119 

104 

5914 

5950 

101 

102 

172 

2252 

103 

122 

120 

105 

5915 

5951 

102 

103 

174 

2253 

104 

123 

.  121 

106 

5916 

5952 

103 

104 

175 

2254 

105 

124 

122 

107 

5917 

5953 

104 

105 

176 

3255 

106 

125 

123 

108 

5918 

5954 

105 

106 

177 

2256 

107 

126 

124 

109 

5919 

5955 

106 

107 

178 

2257 

108 

127 

125 

110 

5920 

5956 

107 

108 

179 

2258 

109 

128 

126 

111 

5921 

5957 

108 

109 

180 

2259 

110 

129 

127 

112 

5922 

5958 

109 

110 

181 

2260 

111 

130 

128 

113 

5923 

5959 

110 

111 

182 

2261 

112 

131 

129 

114 

5924 

5960 

111 

112 

183 

2262 

113 

132 

130 

115 

5925 

5961 

112 

113 

184 

2263 

114 

133 

131 

116 

5926 

5962 

113 

114 

185 

2264 

115 

134 

132 

117 

5927 

5963 

114 

115 

186 

2265 

116 

135 

133 

118 

5928 

5964 

115 

116 

187 

2266 

117 

136 

134 

119 

5929 

5965 

116 

117 

188 

2267 

118 

137 

135 

120 

5930 

5966 

117 

118 

189 

2268 

119 

138 

136 

121 

5931 

5967 

118 

119 

200 

2269 

120 

139 

137 

122 

5932 

5968 

119 

120 

201 

2270 

121 

140 

138 

123 

5933 

5969 

120 

121 

202 

2271 

122 

141 

139 

124 

5934 

5970 

121 

122 

203 

2272 

123 

142 

140 

125 

5935 

5971 

122 

123 

204 

2273 

124 

143 

141 

126 

5936 

5972 

123 

124 

205 

2274 

125 

144 

142 

127 

5937 

5973 

124 

125 

206 

2275 

126 

145 

143 

12S 

5938 

5974 

125 

126 

210 

2276 

127 

146 

144 

129 

5939 

5975 

126 

127 

211 

2277 

128 

147 

145 

130 

5940 

5976 

127 

128 

212 

2278 

129 

148 

146 

131 

5941 

5977 

128 

129 

213 

2279 

130 

149 

147 

132 

5942 

5978 

129 

130 

214 

2280 

131 

150 

148 

133 

5943 

5979 

130 

131 

215 

2281 

132 

151 

149 

134 

5944 

5980 

131 

132 

220 

2282 

133 

152 

150 

135 

5945 

5981 

132 

133 

221 

22S3 

134 

153 

151 

136 

5946 

5982 

133 

134 

222 

2284 

135 

154 

152 

137 

5947 

5983 

134 

135 

223 

2285 

136 

155 

153 

138 

5948 

59S4 

135 

136 

224 

2286 

137 

156 

154 

139 

5949 

5985 

136 

137 

225 

2287 

138 

157 

155 

140 

5950 

5986 

137 

138 

226 

2288 

139 

158 

156 

141 

5951 

5987 

138 

139 

227 

2289 

140 

159 

157 

142 

5952 

5988 

139 

140 

228 

2290 

141 

160 

158 

143 

5953 

5989 

140 

141 

229 

2291 

142 

161 

159 

144 

5954 

5990 

141 

142 

230 

2292 

143 

162 

160 

145 

5955 

5991 

142 

143 

240 

2293 

144 

163 

161 

146 

5956 

5992 

143 

144 

241 

2294 

145 

164 

162 

147 

5957 

5993 

144 

145 

242 

2295 

146 

165 

163 

148 

5958 

5994 

145 

146 

243 

2296 

147 

166 

164 

149 

5959 

5995 

146 

147 

244 

2297 

148 

167 

165 

150 

5960 

5996 

147 

148 

245 

2298 

149 
c 

168 

166 

151 

5961 

5997 

148  ' 

149 

246  ' 

2299 

For  the  numbers  in  other  States,  see  pages  xiii-xvi  and  xxi-xxiv. 


XX 


TABLE   OF   CORRESPONDING   SECTIONS. 


Com- 

mis- 
sioners' 

Md. 

Mass. 

Mich. 

Minn. 

Mon. 

Neb. 

N.H. 

N.  Y. 

N.  C. 

Draft 

150 

169 

167 

152 

5962 

5998 

149 

150 

247 

2300 

151 

170 

168 

153 

5963 

5999 

150 

151 

248 

2301 

152 

171 

169 

154 

5964 

6000 

151 

152 

260 

2302 

153 

172 

170 

155 

5965 

6001 

152 

153 

261 

2303 

154 

173 

171 

156 

5966 

6002 

153 

154 

262 

2304 

155 

174 

172 

157 

5967 

6003 

154 

155 

263 

2305 

156 

175 

173 

158 

5968 

6004 

155 

156 

264 

2306 

157 

176 

174 

159 

5969 

6005 

156 

157 

265 

2307 

158 

177 

175 

160 

5970 

6006 

157 

158 

266 

2308 

159 

178 

176 

161 

5971 

6007 

158 

159 

267 

2309 

160 

179 

177 

162 

5972 

6008 

159 

160 

268 

2310 

161 

180 

178 

163 

5973 

6009 

160 

161 

280 

2311 

162 

181 

179 

164 

5974 

6010 

161 

162 

281 

2312 

163 

182 

180 

165 

5975 

6011 

162 

163 

282 

2313 

164 

183 

181 

166 

5976 

6012 

163 

164 

283 

2314 

165 

184 

182 

167 

5977 

6013 

164 

165 

284 

2315 

166 

185 

183 

168 

5978 

6014 

165 

166 

285 

2316 

167 

186 

184 

169 

5979 

6015 

166 

167 

286 

2317 

168 

187 

185 

170 

5980 

6016 

167 

168 

287 

2318 

169 

1SS 

186 

171 

5981 

6017 

168 

169 

288 

2319 

170 

189 

187 

172 

5982 

6018 

169 

170 

289 

2320 

171 

190 

18S 

173 

5983 

6019 

170 

171 

300 

2321 

172 

191 

189 

174 

5984 

6020 

171 

172 

301 

2322 

173 

192 

190 

175 

5985 

6021 

172 

173 

302 

232  5 

174 

193 

191 

176 

5986 

6022 

173 

174 

303 

2324 

175 

194 

192 

177 

5987 

6023 

174 

175 

304 

2325 

176 

195 

193 

178 

5988 

6024 

175 

176 

305 

2326 

177 

196 

194 

179 

5989 

6025 

176 

177 

306 

2327 

178 

197 

195 

180 

5990 

6026 

177 

178 

310 

2328 

179 

198 

196 

181 

5991 

6027 

178 

179 

311 

2329 

180 

199 

197 

182 

5992 

6028 

179 

180 

312 

2330 

181 

200 

198 

183 

5993 

6029 

180 

181 

313 

2331 

182 

201 

199 

184 

5994 

6030 

181 

182 

314 

2332 

183 

202 

200 

185 

5995 

6031 

182 

183 

315 

2333 

1S4 

203 

201 

186 

5996 

6032 

183 

184 

320 

2334 

185 

204 

202 

187 

5997 

6033 

184 

185 

321 

2335 

186 

205 

203 

188 

5998 

6034 

185 

186 

322 

2336 

187 

206 

204 

189 

5999 

6035 

186 

187 

323 

2337 

188 

207 

205 

190 

6000 

6036 

187 

188 

324 

2338 

189 

208 

206 

191 

6001 

6037 

188 

189 

325 

2339 

190 

13 

.... 

1 

6002 

5842 

1 

191 

14 

207 

2 

6003 

5843 

189 

190 

2 

2340 

192 

15 

208 

2 

6004 

5844 

190 

191 

3 

2342 

193 

16 

209 

2 

6005 

5845 

191 

192 

4 

2343 

194 

17 

210 

2 

6006 

5S46 

192 

193 

5 

195 

18 

211 

2 

6007 

5847 

193 

194 

6 

2345 

196 

19 

212 

2 

600S 

5S48 

194 

195 

■    i 

2344 

197 

19 

.... 

•  •  •  • 

6009 

•  a  •  • 

197 

196 

.... 

198 

«... 

.... 

.... 

198 

196 

.... 

For  the  numbers  in  other  States,  see  pages  xiii-xvi  and  xxi-xxiv. 


TABLE    OF   CORRESPONDING   SECTIONS. 


XXI 


Com- 

mis- 

N. D. 

Okla. 

Ohio 

Ore. 

R.I. 

S.  O 

Tenii. 

Utah 

Wis. 

sioners' 

Draft 

7 

1 

1 

1 

6S86 

4044 

3171 

5834 

1553 

1675-  1 

2 

6887 

4045 

3171a 

5835 

8 

2 

2 

1554 

1675-  2 

3 

6888 

4046 

3171b 

5836 

9 

3 

3 

1555 

1675-  3 

4 

OSS'.I 

4047 

3171c 

5S37 

10 

4 

4 

1556 

11 -.7.-)-  4 

5 

6890 

4048 

3171d 

5838 

11 

5 

5 

1557 

1675-  5 

6 

6891 

4049 

3171e 

5839 

12 

6 

6 

1558 

1075-  6 

7 

6892 

4050 

3171f 

5840 

13 

7 

7 

1559 

1675-  7 

8 

6893 

4051 

3171g 

5S41 

14 

8 

8 

1560 

1675-  8 

9 

6894 

4052 

3171h 

5842 

15 

9 

9 

1561 

1675-  9 

10 

6895 

4053 

3171i 

5843 

16 

10 

10 

1562 

1675-10 

11 

6S96 

4054 

3171J 

5844 

17 

11 

11 

1563 

1675-11 

12 

6897 

4055 

3171k 

5845 

18 

12 

12 

1564 

1675-12 

13 

6898 

4056 

31711 

5846 

19 

13 

13 

1565 

1675-13 

14 

6899 

4057 

3171m 

5847 

20 

14 

14 

1566 

1675-14 

15 

6900 

4058 

3171n 

5848 

21 

15 

15 

1567 

1675-15 

16 

6901 

4059 

3171o 

5849 

22 

16 

16 

1568 

1675-16 

17 

6902 

4060 

3171p 

5850 

23 

17 

17 

1569 

1675-17 

18 

6903 

4061 

3171q 

5851 

24 

18 

18 

1570 

1675-18 

19 

6904 

4062 

3171r 

5852 

25 

19 

19 

1571 

1675-19 

20 

6905 

4063 

3171s 

5853 

26 

20 

20 

1572 

1675-20 

21 

6906 

4064 

3171t 

5S54 

27 

21 

21 

1573 

1675-21 

22 

6907 

4065 

3171u 

5855 

28 

22 

22 

1574 

1675-22 

23 

6908 

4066 

3171v 

5856 

29 

23 

23 

1575 

1675-23 

24 

6909 

4067 

3171w 

5857 

30 

24  '< 

24 

1576 

1675-50 

25 

6910 

4068 

3171x 

5858 

31 

25 

25 

1577 

1675-51 

26 

6911 

4069 

3171y 

5859 

32 

26 

26 

1578 

1675-52 

27 

6912 

4070 

3171z 

5860 

33 

27 

27 

1579 

1675-53 

28 

6913 

4071 

3172 

5861 

34 

28 

28 

1580 

1675-54 

29 

6914 

4072 

3172a 

5862 

35 

29 

29 

1581 

1675-55 

30 

6915 

4073 

3172b 

5863 

36 

30 

30 

1582 

1676 

31 

6916 

4074 

3172c 

5864 

37 

31 

31 

1583 

1676-  1 

32 

6917 

4075 

3172d 

5865 

38 

32 

32 

1584 

1676-  2 

33 

6918 

4076 

3172e 

'5866 

39 

33 

33 

1585 

1676-  3 

34 

6919 

4077 

3172f 

5867 

40 

34 

34 

1586 

1676-  4 

35 

6920 

4078 

3172g 

5868 

41 

35 

35 

1587 

1676-  5 

36 

6921 

4079 

3172b. 

5869 

42 

36 

36 

1588 

1676-  6 

37 

6922 

4080 

3172i 

5870 

43 

37 

37 

1589 

1676-  7 

38 

6923 

4081 

3172] 

5871 

44 

38 

38 

1590 

1676-  8 

39 

6924 

4082 

3172k 

5872 

45 

39 

39 

1591 

1676-  9 

40 

6925 

4083 

31721 

5873 

46 

40 

40 

1592 

1676-10 

41 

6926 

4084 

3172m 

5874 

47 

41 

41 

1593 

1676-11 

42 

6927 

4085 

3172n 

5875 

48 

42 

42 

1594 

1676-12 

43 

6928 

4086 

3172o 

5876 

49 

43 

43 

1595 

1676-13 

44 

6929 

40S7 

3172p 

5877 

50 

44 

44 

1596 

1676-14 

45 

6930 

40SS 

3172q 

5878 

51 

45 

45 

1597 

1676-15 

46 

6931 

4089 

3172r 

5879 

52 

46 

46 

1598 

1676-16 

47 

6932 

4090 

3172s 

5880 

53 

47 

47 

1599 

1676-17 

48 

6933 

4091 

3172t 

5881 

54 

48 

48 

1600 

1676-18 

49 

6934 

4092 

3172u 

5882 

55 

49 

49 

1601 

1676-19 

50 

6935 

4093 

3172v  1  5883 

56 

50 

50 

1602  11676-20 

For  the  numbers  in  other  States,  see  pages  xiii-xvi,  xvii-xx  and  xxiv. 


XX11 


TABLE   OP   CORRESPONDING   SECTIONS. 


c 

Com- 

mis- 

SLOD6TS 

N.  D. 

Okla. 

Ohio 

Ore. 

R.I. 

S.  D.  Te 

Utah 

Wis. 

Draft 

51 

6936 

4094 

3172w 

5884 

57 

51 

51 

1603 

1676-21 

52 

6937 

4095 

3172x 

5885 

58 

52 

52 

1604 

1676-22 

53 

6938 

4096 

3172y 

5886 

59 

53 

53 

1605 

1676-23 

54 

6939 

4097 

3172z 

5887 

60 

54 

54 

1606 

1676-24 

55 

6940 

4098 

3173 

5888 

61 

55 

55 

1607 

1676-25 

56 

6941 

4099 

3173a 

5S89 

62 

56 

56 

1608 

1676-26 

57 

6942 

4100 

31731. 

5890 

63 

57 

57 

1609 

1676-27 

5S 

6943 

4101 

3173c 

5891 

64 

58 

58 

1610 

1676-28 

59 

6944 

4102 

3173d 

5892 

65 

59 

59 

1611 

1676-29 

60 

6945 

4103 

3173e 

5893 

66 

60 

60 

1612 

1677 

61 

6946 

4104 

3173f 

5894 

67 

61 

61 

1613 

1677-  1 

62 

6947 

4105 

3173g 

5895 

68 

62 

62 

1614 

1677-  2 

63 

6948 

4106 

3173h 

5896 

69 

63 

63 

1615 

1677-  3 

64 

6949 

4107 

3173i 

5897 

70 

64 

64 

1616 

1677-  4 

65 

6950 

4108 

3173J 

5898 

71 

65 

65 

1617 

1677-  5 

66 

6951 

4109 

3173k 

5899 

72 

66 

66 

1618 

1677-  6 

67 

6952 

4110 

31731 

5900 

73 

67 

67 

1619 

1677-  7 

68 

6953 

4111 

3173m 

5901 

74 

68 

68 

1620 

1677-  8 

69 

6954 

4112 

3173n 

5902 

75 

69 

69 

1621 

1677-  9 

70 

6955 

4113 

3173o 

5903 

76 

70 

70 

1622 

1678 

71 

6956 

4114 

3173p 

5904 

77 

71 

71 

1623 

1678-  1 

72 

6957 

4115 

3173q 

5905 

78 

72 

72 

1624 

1678-  2 

73 

6958 

4116 

3173r 

5906 

79 

73 

73 

1625 

1678-  3 

74 

6959 

4117 

3173s 

5907 

80 

74 

74 

1626 

1678-  4 

75 

6960 

4118 

3173t 

5908 

81 

75 

75 

1627 

1678-  5 

76 

6961 

4119 

3173u 

5909 

82 

76 

76 

1628 

1678-  6 

77 

6962 

4120 

3173v 

5910 

83 

77 

77 

1629 

1678-  7 

78 

6963 

4121 

3173w 

5911 

84 

78 

78 

1630 

1678-  8 

79 

6964 

4122 

3173x 

5912 

85 

79 

79 

1631 

1678-  9 

80 

6965 

4123 

3173y 

5913 

86 

80 

80 

1632 

1678-10 

81 

6966 

4124 

3173z 

5914 

87 

81 

81 

1633 

1678-11 

82 

6967 

4125 

3174 

5915 

88 

82 

82 

1634 

1678-12 

83 

6968 

4126 

3174a 

5916 

89 

83 

83 

1635 

1678-13 

84 

6969 

4127 

3174b 

5917 

90 

84 

84 

1636 

1678-14 

85 

6970 

4128 

3174c 

5918 

91 

85 

85 

1637 

1678-15 

86 

6971 

4129 

3174d 

5919 

92 

86 

86 

1638 

1678-16 

87 

6972 

4130 

3174e 

5920 

93 

87 

1639 

1678-17 

88 

6973 

4131 

3174f 

5921 

94 

87 

88 

1640 

1678-18 

89 

6974 

4132 

3174g 

5922 

95 

88 

89 

1641 

1678-19 

90 

6975 

4133 

3174h 

5923 

96 

89 

90 

1642 

1678-20 

91 

6976 

4134 

3174i 

5924 

97 

90 

91 

1643 

1678-21 

92 

6977 

4135 

3174] 

5925 

98 

91 

92 

1644 

1678-22 

93 

6978 

4136 

3174k 

5926 

99 

92 

93 

1645 

1678-23 

94 

6979 

4137 

31741 

5927 

100 

93 

94 

1646 

1678-24 

95 

6980 

4138 

3174m 

5928 

101 

94 

95 

1647 

167S-25 

96 

6981 

4139 

3174n 

5929 

102 

95 

96 

1648 

1678-25 

97 

6982 

4140 

3174o 

5930 

103 

96 

97 

1649 

1678-27 

98 

6983 

4141 

3174p 

5931 

104 

97 

98 

1650 

1678-28 

99 

6984 

4142 

3174q 

5932 

105 

98 

99 

1651 

1678-29 

100 

6985 

4143 

3174r 

5933 

106 

99 

100 

1652 

1678-30 

*  For  the  numbers  in  other  States,  see  pages  xiii-xvi,  xvii-xx  and  xxiw 


TABLE   OF   CORRESPONDING    SECTIONS. 


XX111 


(.  !om- 

1 

sioners' 

Draft 

N.  D. 

Okla. 

Ohio 

Ore. 

R.I. 

S.  D. 

Term. 

Utah 

Wis. 

101 

6986 

4144 

3174s 

5934 

107 

100 

101 

1653 

1678-31 

102 

6987 

4145 

3174t 

5935 

108 

101 

102 

1654 

1678-32 

103 

6988 

4146 

3174u 

5936 

109 

102 

103 

1655 

1678-33 

104 

6989 

4147 

3174v 

5937 

110 

103 

104 

1656 

1678-34 

105 

6990 

4148 

3174w 

5938 

111 

104 

105 

1657 

1678-35 

106 

6991 

4149 

3174x 

5939 

112 

105 

106 

1658 

1678-36 

107 

6992 

4150 

3174y 

5940 

113 

106 

107 

1659 

1678-37 

108 

6993 

4151 

3174z 

5941 

114 

107 

108 

1660 

1678-38 

109 

6994 

4152 

3175 

5942 

115 

108 

109 

1661 

1678-39 

110 

6995 

4153 

3175a 

5943 

116 

109 

110 

1662 

1678-40 

111 

6996 

4154 

3175b 

5944 

117 

110 

111 

1663 

1678-41 

112 

6997 

4155 

3175c 

5945 

118 

111 

112 

1664 

1678-42 

113 

6998 

4156 

3175d 

5946 

119 

112 

113 

1665 

1678-43 

114 

6999 

4157 

3175e 

5947 

120 

113 

114 

1665x 

1678-44 

115 

7000 

4158 

3175f 

5948 

121 

114 

115 

1665x  1 

1678-45 

116 

7001 

4159 

3175g 

5949 

122 

115 

116 

1665x  2 

1678-46 

117 

7002 

4160 

3175h 

5950 

123 

116 

117 

1665x  3 

1678-47 

118 

7003 

4161 

31751 

5951 

124 

117 

118 

1665x  4 

1678-48 

119 

7004 

4162 

3175J 

5952 

125 

118 

119 

1665x  5 

1679 

120 

7005 

4163 

3175k 

5953 

126 

119 

120 

1665x  6 

1679-  1 

121 

7006 

4164 

31751 

5954 

127 

120 

121 

1665x  7 

1679-  2 

122 

7007 

4165 

3275m 

5955 

128 

121 

122 

1665x  8 

1679-  3 

123 

7008 

4156 

3175n 

5956 

129 

122 

123 

1665x  9 

1679-  4 

124 

7009 

4167 

3175o 

5957 

130 

123 

124 

1665x10 

1679-  5 

125 

7010 

4168 

3175p 

5958 

131 

124 

125 

1665x11 

1679-  6 

126 

7011 

4169 

3175q 

5959 

132 

125 

126 

1665x12 

1680 

127 

7012 

4170 

3175r 

5960 

133 

126 

127 

1665x13 

1680-a 

128 

7013 

4171 

3175s 

5961 

134 

127 

128 

1665x14 

1680-b 

129 

7014 

4172 

3175t 

5962 

135 

128 

129 

1665x15 

1680-c 

130 

7015 

4173 

3175u 

5963 

136 

129 

130 

1665x16 

1680-d 

131 

7016 

4174 

3175v 

5964 

137 

130 

131 

1665x17 

1680-e 

132 

7017 

4175 

3175w 

5965 

138 

131 

132 

1665x18 

1680-f 

133 

7018 

4176 

3175x 

5966 

139 

132 

133 

1665x19 

1689-g 

134 

7019 

4177 

3175y 

5967 

140 

133 

134 

1665x20 

1680-h 

135 

7020 

4178 

3175z 

5968 

141 

134 

135 

1665x21 

1680-i 

136 

7021 

4179 

3176 

5969 

142 

135 

136 

1665x22 

1680-j 

137 

7022 

4180 

3176a 

5970 

143 

■  •  a 

137 

1665x23 

1680-k  • 

138 

7023 

4181 

3176b 

5971 

144 

136 

138 

1665x24 

1680-1 

139 

7024 

4182 

3176c 

5972 

145 

137 

139 

1665x25 

1680-m 

140 

7025 

4183 

3176d 

5973 

146 

138 

140 

1665x26 

1680-n 

141 

7026 

4184 

3176e 

5974 

147 

139 

141 

1665x27 

1680-o 

142 

7027 

4185 

3176f 

5975 

148 

140 

142 

1665x28 

1680-p 

143 

7028 

4186 

3176g 

5976 

149 

141 

143 

1665x29 

1681 

144 

7029 

4187 

3176h 

5977 

150 

142 

144 

1665x30 

1681-  1 

145 

7030 

4188 

31761 

5978 

151 

143 

145 

1665x31 

1681-  2 

146 

7031 

4189 

3176J 

5979 

152 

144 

146 

1665x32 

1681-  3 

147 

7032 

4190 

3176k 

5980 

153 

145 

147 

1665x33 

1681-  4 

148 

7033 

4191 

31761 

5981 

154 

146 

148 

1665x34 

1681-  5 

149 

7033a 

4192 

3176m 

5982 

155 

147 

149 

1665x35 

1681-  6 

*  For  the  numbers  in  other  States,  see  pages  xiii-xvi,  xvii-xx  and  xxiv. 


XXIV 


TABLE    OF   CORRESPONDING    SECTIONS.* 


Com- 

■% 

mis- 
sion! 

Draft 

N.  D. 

Okla. 

Ohio 

Ore. 

R.I. 

S.  D. 

Tenn. 

Utah 

Wis. 

150 

7(131 

4193 

3176n 

5983 

156 

148 

150 

1665x36 

1681-  7 

151 

7035 

4194 

3176o 

5984 

157 

149 

151 

1665x37 

1681-  8 

152 

7036 

4195 

3176p 

5985 

158 

150 

152 

1665x38 

1681-  9 

153 

7037 

4196 

3176q 

5986 

159 

151 

153 

1665x39 

1681-10 

154 

7038 

4197 

3176r 

5987 

160 

152 

154 

1665x40 

1681-11 

155 

7039 

4198 

3176s 

5988 

161 

153 

155 

1665x41 

1681-12 

156 

7040 

4199 

3176t 

5989 

162 

154 

156 

1665x42 

1681-13 

157 

7041 

4200 

3176u 

5990 

163 

155 

157 

1665x43 

1681-14 

158 

7042 

4201 

317()v 

5991 

164 

156 

15S 

1665x44 

1681-15 

159 

7043 

4202 

3176w 

5992 

165 

157 

159 

1665x45 

1681-16 

160 

7044 

4203 

3176x 

5993 

166 

158 

160 

1665x46 

1681-17 

161 

7045 

4204 

3176y 

5994 

167 

159 

161 

1665x47 

1681-18 

162 

7046 

4205 

3176z 

5995 

168 

160 

162 

1665x48 

1681-19 

163 

7047 

4206 

3177 

5996 

169 

161 

163 

1665x49 

1681-20 

164 

7048 

4207 

.  3177a 

5997 

170 

162 

164 

1665x50 

1681-21 

165 

7049 

4208 

3177b 

5998 

171 

163 

165 

1665x51 

1681-22 

166 

7050 

4209 

3177c 

5999 

172 

164 

166 

1665x52 

1681-23 

167 

7051 

4210 

3177d 

6000 

173 

165 

167 

1665x53 

1681-24 

168 

7052 

4211 

3177e 

6001 

174 

166 

168 

1665x54 

1681-25 

169 

7053 

4212 

3177f 

6002 

175 

167 

169 

1665x55 

1681-26 

170 

7054 

4213 

3177g 

6003 

176 

168 

170 

1665x56 

1681-27 

171 

7055 

4214 

3177h 

6004 

177 

169 

171 

1665x57 

1681-28 

172 

7056 

4215 

3177i 

6005 

178 

170 

172 

1665x58 

1681-29 

173 

7057 

4216 

3177J 

6006 

179 

171 

173 

1665x59 

1681-30 

174 

7058 

4217 

3177k 

6007 

180 

172 

174 

1665x60 

1681-31 

175 

7059 

4218 

31771 

6008 

181 

173 

175 

1665x61 

1681-32 

176 

7060 

4219 

3177m 

6009 

182 

174 

176 

1665x62 

1681-33 

177 

7061 

4220 

3177n 

6010 

183 

175 

177 

1665x63 

1681-34 

178 

7062 

4221 

3177o 

6011 

184 

176 

178 

1665x64 

1681-35 

179 

7063 

4222 

3177p 

6012 

185 

177 

179 

1665x65 

1681-36 

180 

7064 

4223 

3177q 

6013 

186 

178 

180 

1665x66 

1681-37 

181 

7065 

4224 

3177r 

6014 

187 

179 

181 

1665x67 

1681-38 

182 

7066 

4225 

3177s 

6015 

188 

180 

182 

1665x68 

1681-39 

183 

7067 

4226 

3177t 

6016 

189 

181 

183 

1665x69 

1681-40 

184 

7068 

4227 

3177u 

6017 

190 

182 

184 

1665x70 

1684 

185 

7069 

4228 

3177v 

6018 

191 

183 

185 

1665x71 

1684-  1 

186 

7070 

4229 

3177w 

6019 

192 

184 

186 

1665x72 

1684-  2 

187 

7071 

4230 

3177x 

6020 

193 

185 

187 

1665x73 

1684-  3 

188 

7072 

4231 

3177y 

6021 

194 

1S6 

188 

1665x74 

1684-  4 

189 

7073 

4232 

3177z 

6022 

195 

187 

189 

1665x75 

1684-  5 

190 

7074 

4233 

6023 

188 

1665x76 

191 

7075 

4234 

3178 

6023 

1 

189 

1665x77 

1675 

192 

7076 

4235 

3178a 

6023 

2 

190 

.  . 

1665x78 

1675 

193 

7077 

4236 

3178b 

6023 

3 

191 

#  # 

1665x79 

1675 

194 

7078 

4237 

3178c 

6023 

4 

192 

1665x80 

1675 

195 

7079 

4238 

3178d 

6024 

5 

193 

1665x81 

1675 

196 

7080 

4239 

3178e 

6025 

6 

194 

1665x82 

1675 

197 

•  •  •  • 

■  •  •  • 

•  •  •  •  • 

.... 

•  •  • 

196 

1684-  7 

198 







.... 





*  For  the  numbers  in  other  States,  see  pages  xiii-xvi.  xvii-xx,  and  xxiv. 

Note. —  In  Alaska.  Arkansas,  Delaware.  Hawaii,  Iowa,  Louisiana.  Nevada,  New 
Jersey,  New  Mexico,  Pennsylvania,  Rhode  Island.  Vermont,  Virginia,  West  Vir- 
ginia and  Wyoming,  the  numbers  are  the  same  as  in  the  commissioners'  draft.  In 
Kentucky  the  act  has  been  included  in  Carroll's  Kentucky  Statutes  under  the  gen- 
eral heading  of  section  3720b,  but  the  original  numbers,  which  are  the  same  as  in 
the  commissioners'  draft  are  preserved. 


TABLE  OF  CASES. 


PAGE 

Abbott  v.  Le  Prevost,  166  App.  Div.  40 70 

Ackley  School  District  v.  Hall,  113  U.  S.  135 20 

Acme  Coal  Company  v.  Northup  Nat.  Bank,  146  Pac.  Rep.  593 .     48 

Adair  v.  Lenox,  15*  Ore.  489 88,  114,  163 

Adams  v.  Wright,  14  Wis.  408 177,  234 

v.  Hackensack,  44  N.  J.  L.  638 162 

Aebi  v.  Bank  of  Evansville,  124  Wis.  73,  81 185,  250 

Aetna  National  Bank  v.  Charter  Oak  Life  Ins.  Co.  50  Conn. .   167 

701 
v.  Fourth  National  Bank,  46  N.  Y.  82. . .   161 

Aiken  v.  Marine  Bank,  16  Wis.  679 170 

Albany  County  Bank  v.  Peoples'  Ice  Co.,  92  App.  Div.  47.  .97,  100 

Albert  v.  Hoffman,  64  Misc.  87 31,     35 

Albertson  v.  Laughlin,  173  Pa.  St.  525 20 

Albrecht  v.  Atrimpler,  7  Pa.  St.  476 66 

Alexander  &  Co.  v.  Hazelrigg,  123  Ky.  677 109,  246 

Alger  v.  Scott,  54  N.  Y.  14 .213 

Allen  v.  Corn  Exchange  Bank,  87  App.  Div.  335 84 

v.  Rightmere,  20  Johns.  365 167 

v.  Suydam,  17  Wend.  368 227 

American  Bank  v.  Jenness,  2  Mete.  288 100 

Bank  v.  McComb,  105  Va.  473 95 

Exchange  National  Bank  v.  American  Hotel  Victoria 

Co.,  103  App.  Div.  372 173 

Exchange  National  Bank  v.  New  York  Belting,  etc., 

Co.,  148  N.  Y.  698 103,  106 

Nat.  Bank  v.  Fountain,  148  N.  C.  590 116 

Nat.  Bank  v.  Halsell,  43  Okla.  126 15 

Nat.  Bank  v.  Junk  Bros.,  94  Tenn.  634 176 

Nat.  Bank  v.  Hill,  85  S.  E.  Rep.  209 65 

Nat.  Bank  v.  Lundy,  21  N.  D.  167 103 

Nat.  Bank  v.  Nat.  Fertilizer  Co.,  125  Tenn.  328.  .173,  184 

Savings  v.  Helgersen,  64  Wash.  54 109 

Trust  Co.  v.  Canevin,   184  Fed.  Rep.  657 5 

Amsinck  v.  Rogers,  189  N.  Y.  252, 103  App.  Div.  428.  .141,  214,  192 

Anderson  v.  First  Nat.  Bank  of  Charleston,  144  Iowa,  251 145 

Andrews  v.  German  Nat.  Bank,  9  Heisk  211 , 253 

Sibley,  220  Mass.  10 208 

[xxvl 


V. 


XXVI  TABLE   OF   CASES.  •" 

PAGE 

Androscoggin  Bank  v.  Kimball,  10  Cush.  373 38 

Angle  v.  Insurance  Co.,  92  U.  S.  330 210 

Anglo-So.  Amer.  Bank  v.  Nat.  City  Bank,  161  App.  Div.  268. .  251 

252 
Annville  National  Bank  v.  Kettering,  106  Pa.  St.  531, 534.  .185,  186 

Anthony  v.  Balentine,  130  Mass.  119 66 

Archuleta  v.  Johnston,  53  Colo.  393 151,  182 

Arlington  Nat.  Bank  v.  Bennett,  214  Mass.  352 198 

Armour  v.  McMichael,  36  N.  J.  Law  92 61 

Armstrong  v.  American  Exchange  Nat.  Bank,  133  U.  S.  433. . .     96 

214 

v.  Bank,  46  Ohio  St.  412 32 

v.  National  Bank  of  Boyertown,  90  Ky.  431 79 

v.  Thurston,  11  Md.  148 155 

Arnd  v.  Aylesworth,  145  Iowa,  185 103,  116 

v.  Heckert,  108  Md.  300 28 

v.  Sjoblom,  131  Wis.  642 Ill 

Arnold  v.  Dresser,  8  Allen,  435 153 

v.  Rock  River  Valley  Union  R.  R.  Co.,  5  Duer,  207 24 

Aronson  v.  Nurenberg,  218  Mass.  376 133 

Artisans'  Bank  v.  Backus,  36  N.  Y.  106 176 

Asbury  v.  Taube,  151  Ky.  142 100,  116,  250 

Assets  Realization  Co.   v.   Mercantile   Nat.   Bank,  167  App. 

Div.  757   202 

Attorney-General  v.  Continental  Life  Insurance  Co.,  71  N.  Y. 

325 254 

Aukland  v.  Arnold  (Wis.),  Ill  N.  W.  Rep.  212 102 

Aurora  State  Bank  v.  Hayes-Eames  Elevator  Co.,  88  Neb. 

187 74,  203 

Austin  v.  First  Nat.  Bank,  150  Ky.  133 96 

Ayer  v.  Hutehins,  4  Mass.  370 97,  100 

Aymar  v.  Beers,  7  Cow.  705 7 

Bachelor  v.  Priest,  12  Pick.  399 227 

Backus  v.  Danforth,  10  Conn.  297 12 

Bacon  v.  Burnham,  37  N.  Y.  614 126 

v.  Hanna,  137  N.  Y.  379 188 

v.  Page,  1  Conn.  405 29 

Baer  v.  Hoffman,  150  App.  Div.  473 157 

v.  Leppert,  12  Hun,  516 188 

Bailey  v.  Southwestern  R.  R.  Bank,  11  Fla.  266 199,  213 

Baker  v.  Denning,  8  Adol  &  Ellis,  94 12 

Baldwin  v.  Daly,  41  Wash.  416 205 


TABLE   OF   CASES.  XXV11 

PAGE 

Baldwin's  Bank  v.  Smith,  215  N.  Y.  76 162 

Baltimore  &  Ohio  Railroad  Co.  v.  First  National  Bank  of  Alex- 
andria, 102  Va.  753 4,  245 

Ballen  v.  Bank  of  Krenlin,  37  Okla.  12 217 

Bamford  v.  Boynton,  200  Mass.  560 134 

Bank  v.  Busby,  120  Tenn.  652 191 

v.  Carter,  88  Tenn.  279 254 

v.  Dibbrell,  91  Tenn.  301 170,  252 

v.  Looney,  99  Tenn.  278 53,  117 

v.  Millard,  10  Wall.  152 254 

v.  Patton,  109  111.  479 254 

v.  Pierce,  137  N.  Y.  444 194 

v.  Price,  52  Iowa,  530 29 

v.  Schuler,  120  U.  S.  511 254 

v.  Simpson,  90  N.  C.  469 200 

Bank  of  Alexandria  v.  Swann,  9  Peters,  33 176 

America  v.  Senior,  11  R.  I.  376 89 

America  v.  Way  dell,  187  N.  Y.  115 63,  79,    98 

British  North  America  v.  Ellis,  6  Sawyer,  98 87 

Bromfield  v.  Mckinley,  53  Colo.  279 90 

Columbia  v.  Lawrence,  1  Peters,  578 173,  179,  182 

Commerce  v.  Mechanics  Nat.  Bank,  148  Mo.  App.  1 . .  120 

Cooperstown  v.  Woods,  28  N.  Y.  545 171 

England  v.  Vagliano  (1891),  App.  Cas.  107 32 

Genesee  v.  Patchin  Bank,  13  N.  Y.  309 69,    85 

Gresham  v.  Walsh,  157  Pac.  Rep.  534 66 

Houston  v.  Day,  145  Mo.  App.  410 28,  36,  39,    95 

Jamaica  v.  Jefferson,  92  Tenn.  537 125,  135 

LaCrosse  v.  Michel,  152  Wis.  88 201 

Metropolis  v.  First  National  Bank  of  Jersey  City,  19 

Fed.  Rep.  658 79 

Michigan  v.  Ely,  17  Wend.  508 219 

Monangahela  Valley  v.  Weston,  172  N.  Y.  259 104 

Montgomery  County  v.  Walker,  9  S.  &  R.  229 68 

Monticello  v.  Dooly,  113  Wis.  590 60 

Montpelier  v.  Montpelier  Lumber  Co.,  16  Idaho  730.   187 

Morgantown  v.  Hay,  143  N.  C.  326 220 

Neelyville  v.  Lee,   92  Mo.  App.  185 16 

Ohio  Valley  v.  Lockwood,  132  W.  Va.  392 210 

Polk  v.  Wood,  189  Mo.  App.  62 117 

Port  Jefferson  v.  Darling,  91  Hun,  236 174,  184 

Rome  v.  Village  of  Rome,  19  N.  Y.  20 27 

Sampson  v.  Hatcher,  151  N.  C.  359 81,  104,  107 


SXV111  TABLE   OF   CASES. 

PAGE 

Bank  of  St.  Albans  v.  Farmers'  and  Mechanics'  Bank,  10  Vt, 

141 120 

Syracuse  v.  Hollister,  17  N.  Y.  46 150 

the  State  v.  Muskingum  Bank,  29  N.  Y.  619 85 

United  States  v.  Bank  of  Georgia,  10  Wheat.  333 .. .  120 

v.  Bierne,  1  Gratt.  234 134 

v.  Carneal,  2  Peters,  543 172,  183 

v.  United  States,  2  How.  U.  S.  745..  232 

Utica  v.  Ives,  17  Wend.  501 199 

v.  Smith,  18  Johns.  230 150 

Bankers'  Iowa  State  Bank  v.  Mason  Hand  Lathe  Co.,  121 

Iowa,  570    68,    71 

Barclay  v.  Weaver,  19  Pa.  St.  396 157 

Bardsley  v.  Washington  Mill  Co.,  54  Wash.  553 140,  148 

Baring  v.  Clark,  19  Pick.  220 194,  238 

Barker  v.  Parker,  6  Pick.  80 156 

Barkley  v.  Muller,  164  App.  Div.  351 77 

Barry  v.  Crowley,  4  Gill,  (Md.)   194 233,  234 

Bartiett  v.  Isbell,  31  Conn.  297 133,  188 

v.  Robinson,  39  N.  Y.  187 182 

Baruch  v.  Buckley,  167  App.  Div.  113 103 

Bass  v.  Inhabitants  of  Wellesley,  192  Mass.  526 194 

Bassonhorst  v.  Wilby,  45  Ohio  St.  336 29- 

Batchelder  v.  White,  80  Va.  103 209 

Bateman  v.  Joseph,  2  Camp.  461 187 

Batterman  v.  Dutcher,  95  App.  Div.  213 66 

Baumeister  v.  Kuntz,  53  Fla.  340 4,  156,  157,  186 

Baumgardner  v.  Reeves,  35  Pa.  St.  250 147 

Baxendale  v.  Bennett,  L.  R.  3  Q.  B.  Div.  525 41 

Baxter  v.  Little,  6  Met.  7 114 

Bay  v.  Church,  15  Conn.  129 192 

Bealls  v.  Peck,  12  Barb.  245 175 

Beard  v.  Dedolph,  29  Wis.  136 92 

Beauregard  v.  Knowlton,  156  Mass.  395 153 

Beckwith  v.  Angell,  6  Conn.  317 78 

Bedford  Bank  v.  Acoarn,  125  Ind.  582 161 

Beem  v.  Farrell,  135  Iowa,  670 56 

Belch  v.  Roberts,  177  Swrep.  1062 154 

Belden  v.  Hann,  61  Iowa,  42 78 

v.  Lamb,  17  Conn.  451 154 

Bell  v.  Alexander,  21  Gratt.  1 250 

v.  Hagerstown  Bank,  7  Gill,  216 173,  177,  179 

Bell-Knox  Coal  Co.  v.  Gregory,  152  Ky.  413 187 


TABLE   OF   CASES.  Xxix 


PAGE 

Belmont  Dairy  v.  Thrasher,  124  Md.  320 54 

Belmont  v.  Hoge,  35  N.  Y.  65 103 

Bemis  v.  McKenzie,  13  Fla.  553 29 

Bender  v.  Bahr  Trucking  Co.,  144  App.  Div.  742 127 

Benedict  v.  Kress,  97  App.  Div.  65 60 

v.  Schmieg,  13  Wash.  476 153 

Benjamin  v.  Rogers,  126  N.  Y.  60 71 

Benn  v.  Kutzsehan,  24  Ore.  28 15,  132 

Bennett  v.  McGaughy,  4  Miss.  192 84 

Bensonhurst  v.  Wilby,  45  Ohio  St.  340 155 

Benton  v.  Sikyta,  84  Neb.  808 65,  75,  257 

Berenson  v.  London  Ins.  Co.,  201  Mass.  172 22 

Berg  v.  Abbott,  83  Pa.  St.  177 151 

Berkley  v.  Tinsley,  88  Va.  1001,  1004 69 

Berry  v.  Robinson,  9  Johns.  121 29,  88 

Biegler  v.  Merchants'  Loan  and  Trust  Co.,  62  111.  App.  560. . .  24 

Bigge  v.  Piper,  86  Tenn.  589 27 

Bigley 's  Admr.  v.  Cluff,  16  Gratt.  284,  291,  292 183 

Binghamton  Phar.  v.  First  Nat.  Bank,  131  Tenn.  711 162 

Bird  v.  Kay,  40  App.  Div.  533 124 

Birrell  v.  Dickerson,  64  Conn.  61 112 

Bisbing  v.  Graham,  14  Pa.  St.  4 82 

Bishop  v.  Chase,  156  Mo.  158 76 

v.  Dexter,  2  Conn.  419 29 

Black  v.  First  National  Bank  of  Westminster,  96  Md.  399.  .71,  114 

v.  Ridgway,  131  Mass.  80 67 

Blackman  v.  Lehman,  63  Ala.  547 31,  75,  134 

v.  Nearing,  43  Conn.  60 151 

Blaine  v.  Bourne,  11  R.  I.  119 79 

Blair  v.  Wilson,  28  Grat.  170 247 

Blakeslee  v.  Hewett,  16  Wis.  341 146 

Blenderman  v.  Price,  50  N.  J.  Law,  296 196 

Block  v.  Bell,  1  M.  &  R.  149 49 

Board  of  Education  v.  Fonda,  77  N.  Y.  350,  362 199 

Boehm  v.  Sterling,  7  T.  R.  423,  430 96 

Boetcher  v.  Colorado  National  Bank,  15  Colo.  16 254 

Bogarth  v.  Breedlove,  39  Tex.  561 210 

Bond  v.  Farnham,  5  Mass.  170 156,  185 

v.  Storrs,  13  Conn.  416 140 

Born  v.  First  National  Bank,  123  Ind.  78 253 

Borough  of  Montvale  v.  Peoples  Bank,  74  N.  J.  L.  464 3,  45 

Boston  Bank  v.  Hodges,  9  Pick.  420 151 

Boston  Steel  &  Iron  Co.  v.  Steuer,  183  Mass.  140 40,  96 


XXX  TABLE   OF    CASES. 

PAGE 

Boswell  v.  Citizens  Savings  Bank,  123  Ky.  485 248 

Bothell  v.  Sehweister,  84  Neb.  271 219 

Bowen  v.  Newell,  8  N.  Y.  100;  13  N.  Y.  390 248 

Bowles  v.  Harding,  20  Mass.  103 33 

Boyd  v.  Bank  of  Toledo,  32  Ohio  St.  526 156 

v.  McCann,  10  Md.  118 38,  114 

v.  Orton,  16  Wis.  495 175 

Boyd's  Admr.  v.  City  Savings  Bank,  15  Gratt.  501 173,  175 

Brackett  v.  Mountford,  11  Me.  115 211 

Bradley  Engrav.  Co.  v.  Heyburn,  56  Wash.  628 113,  72,  119 

Brady  v.  Brady,  110  Md.  656 118 

Brailsford  v.  Williams,  15  Md.  151 168 

Brainerd  v.  N.  Y.  &  H.  R.  R.  Co.,  25  N.  Y.  496 27 

Branihall  v.  Atlantic  National  Bank,  36  N.  J.  Law,  243 112 

Brandt  v.  Mickle,  26  Md.  436 156 

Bray  v.  Hadwen,  5  Maule  &  Sel.  68 181 

Breckhill  v.  Randall,  102  Ind.  528 257 

Breed  v.  Hillhouse,  7  Conn.  523 167 

Breneman  v.  Furniss,  90  Pa.  St.  186 66,  135 

Breuner  v.  New  Universal  Fertilizer  Co.,  218  Mass.  300 64 

Brewster  v.  Arnold,  1  Wis.  264 171,  186 

v.  MeCardle,  8  Wend,  478 35,     95 

v.  Schrader,  26  Misc.  (N.  Y.)  480 63 

Bridgeport  City  Bank  v.  The  Empire  Stone  Dressing  Co.,  30 

Barb.  421 69 

Bridgeport  City  Bank  v.  Welsh,  29  Conn.  475 61 

Bridgewater  v.  Spies,  130  N.  W.  Rep.  Iowa,  928 30 

Briggs  v.  Partridge,  64  N.  Y.  363 51 

Bright  v.  Offleld,  81  Wash.  442 13, 14, 16, 18,  21,    23 

Brill  v.  Jefferson  Bank,  159  App.  Div.  461 170 

v.  Tuttle,  81  N.  Y.  454,  457 213 

Co.  v.  Norton  &  Taunton  St.  Ry.  Co.,  189  Mass.  431 69 

Brinden  v.  Muskegon  Sav.  Bank,  140  N.  W.  Rep.  549 24 

Bringman  v.  Von  Glahn,  71  App.  Div.  537 60,     66 

Bristol  v.  Warner,  19  Conn.  7 21,  27,  245 

Broadway  Nat.  Bank  v.  Hefferman,  220  Mass.  247 207,  209 

Broadway  Trust  Co.  v.  Manheimer,  47  Misc.  465 Ill 

Brockway  v.  Allen,  17  Wend.  40 224 

Broderick  &  B.  R.  Co.  v.  McGrath,  81  Misc.  199 63,  117 

Brooks  v.  Sullivan,  129  N.  C.  190 61,  63,    64 

Brown  v.  Bank  of  Abington,  85  Va.  95 173 

v.  Brown,  91  Misc.  220 4,     96 

v.  Butchers'  and  Drovers'  Bank,  6  Hill,  443. . .  .11,  12,    33 


TABLE   OF   CASES.  XXXI 

PAGE 

Brown  v.  Citizens  Bank,  185  Ala.  221 115 

v.  Cow  Creek  Sheep  Co.,  21  Wyo.  1 18 

v.  Curtiss,  2   N.   Y.   225 1G7 

v.  Davis,  3  T.  R.  80 96 

v.  Hull,  33  Gratt.  23 29,  87,    88 

v.  Maffey,  15  East,  222 150 

v.  Marmaduke,  248  Pa.  St.  247 200 

Browne  v.  Philadelphia  Bank,  0  S.  &  R.  484 233 

Brownell  v.  Winnie,  29  N.  Y.  400 210 

Bryant  v.  Eastman,  7  Cush.  Ill 86 

v.  La  Banque  du  Peuple  (1893),  App.  Cas.  170.- 55 

v.  Taylor,  19  Minn.  396 186 

Buchanan  v.  Wren,  30  S.  W.  Rep.  1077 20 

Buck  v.  Freehold  Bank,  37  N.  J.  Law,  307 158 

Buckner  v.  Finley,  2  Peters,  586 214 

Builders  Lime  &  Cement  Co.  v.  Weimer,  151  N.  W.  Rep.  100. . .   207 

Building  &  Eng.  Co.  v.  Northern  Bank,  206  N.  Y.  400 72 

Bull  v.  Bank  of  Kasson,  123  U.  S.  105 247 

Burgess  v.  Vreeland,  4  Zab.  71 178 

Burgettstown  National  Bank  v.  Nill,  213  Pa.  St.  456 157 

Burner  v.  New  Universal  Fertilizer  Co.,  218  Mass.  300 65 

Burr  v.  Beckler,  264  111.  230 44 

Burrows  v.  Klunk,  70  Md.  451 40 

Burroughs  v.  Moss,  10  Barn.  &  Cress.  558 113 

Burson  v.  Huntington,  21  Mich.  416 44,    46 

Burwell  v.  Gaylord,  119  Minn.  426 133 

Bush  v.  Gilmore,  45  App.  Div.  (N.  Y.)  89 139 

Buzzell  v.  Tobin,  201  Mass.  1 45 

Cabot  Bank  v.  Morton,  4  Gray,  156 137 

v.   Warner,  92   Mass.   522 169 

Cady  v.  Bradshaw,  116  N.  Y.  188 156 

Callahan  v.  Kentucky  Bank,  82  Ky.  231 176 

v.  Louisville  Dry  Goods  Co.,  140  Ky.  712.  .90,  91,  94,  116 

Camley  v.  Dunn,  167  N.  C.  32 247 

Camden  National  Bank  v.  Fries-Breslin  Co.,  214  Pa.  St.  395. .     65 

Campbell  v.  Fourth  Nat.  Bank,  137  Ky.  555 116 

v.  French,  6  T.  R.  200 191 

Canajoharie  National  Bank  v.  Diefendorf,  123  N.  Y.  191.  .103,  115 

Canal  Bank  v.  Bank  of  Albany,  1  Hill,  287 128 

Cantrell  v.  Davidson,  180  Mo.  App.  410 194 

Caras  v.  Thalmann,  138  App.  Div.  297 242,  244 

Carnegie  Trust  Co.  v.  First  Nat.  Bank,  213  N.  Y.  301 252 

Carnwright  v.  Gray,  127  N.  Y.  92 21,  30,  245 


XXX11  TABLE   OF   CASES. 

PAGE 

Carpenter  v.  National  Bank  of  the  Republic,  106  Pa.  St.  170. .     68 

Carr  v.  Leferre,  27  Pa.  St.  413 12 

Carroll  v.  Sweet,  128  N.  Y.  19 249 

Carsey  v.  Swan,  150  Ky.  473 16 

Carter  v.  Burley,  9  N.  H.  558 233 

v.  Butler,  264  Mo.  306 60,  66,  75,    90 

v.  Wolf,  1  Heisk,  674 53 

Cary  v.  White,  52  N.  Y.  138 61,  198,  199 

Case  v.  Bridger,  133  La.  754 195 

v.  Bevet,  15  Mich.  82 221 

Casco  National  Bank  v.  Clark,  139  N.  Y.  307 53 

Casper  v.  Kuhne,  159  App.  Div.  389 244 

Cayuga  County  Bank  v.  Bennett,  5  Hill,  236 175 

v.  Hunt,  2  Hill,  635 152,  177 

v.  Warden,  1  N.  Y.  413 171 

v.  Warden,  6  N.  Y.  19 170,  172 

Cecil  Bank  v.  Farmers'  Bank,  22  Md.  148 79 

Cedar  Rapids  Nat.  Bank  v.  Bashara,  39  Okla.  482 87 

Cellers  v.  Meachem,  49  Ore.  186 119 

Central  Bank  v.  The  Empire  Stone  Dressing  Co.,  26  Barb.  23,     69 

National  Bank  v.  Cobb,  184  Mass.  328 58 

v.  Dreydoppel,  134  Pa.  St.  499 126 

v.  Stoddard,  83  Conn.  332 180 

R.  R.  Co.  v.  The  First  National  Bank  of  Lynchburg, 

73  Ga.  384 79 

Trust  Co.  v.  Smurr,  191  111.  App.  613 70 

Century  Bank  v.  Breitbart,  89  Misc.  308 4,  182 

Chadsey  v.  Guion,  97  N.  Y.  333 48 

Champion  v.  Gordon,  70  Pa.  St.  474 248 

Chandler  v.  Drew,  6  N.  H.  469 114 

v.  Hedrick,  187  Mo.  App.  664 46 

Chamoine  v.  Fowler,  3  Wend.  173 168 

Chapman  v.  Keene,  3  Adol.  &  Ellis,  193 168 

v.  White,  6  N.  Y.  412 242 

Charles  v.  Dennis,  42  Wis.  56 133 

Chase  National  Bank  v.  Faurot,  149  N.  Y.  532 27 

Chateau  Tr.  &  Banking  Co.  v.  Smith,  133  Ky.  418 113 

Cheeney  v.  Libby,  134  U.  S.  68 162 

Cheever  v.  Pittsburgh,  Shenango  &  Lake  Erie  R.  R.  Co.,  150 

N.  Y.  59 103 

Chelsea  Exchange  Bank  v.  First  U.  P.  Church,  89  Misc.  616.54,  86 
Chemical  National  Bank  v.  Kellogg,  183  N.  Y.  92.... 87,  105,  111 
Cherokee  Nat.  Bank  v.  Union  Trust  Co.,  33  Okla.  342 4,  121 


TABLE   OF   CASES.  XXX1U 

PAGE 

Chestnut  v.  Chestnut,  104  Va.  539 39 

Chicago,  etc.,  R.  R.  Co.  v.  West,  37  Ind.  211 189 

Railway  Equipment  Co.  v.  Merchants'  National  Bank, 

136  U.  S.  268 17 

Chicopee  Bank  v.  Chapin,  8  Mete.  40 65 

Chipman  v.  Tucker,  38  Wis.  43 „ 45 

Chouteau  v.  Webster,  6  Mete.  1 183 

Christian  v.  Keene,  80  Va.  369 122 

Church  v.  Clark,  21  Pick.  309 151 

v.  Howard,  17  Hun,  5 .. 216 

v.  Stevens,  107  N.  Y.  Supp.  310 27 

v.  Stevens,  56  Misc.  572 140 

Chyrsler  v.  Griswold,  43  N.  Y.  209 28 

Cincinnati  H.  &  D.  R.  R.  Co.  v.  Metropolitan  National  Bank, 

54  Ohio   St.   60 254 

Cincinnati  Oyster  &  Fish  Co.  v.  National  Lafayette  Bank,  51 

Ohio  St.  106 ' 253 

Citizens'  Bank  v.  Crittenden  Record  Press,  150  Ky.  634 109 

v.  First  National  Bank,  135  Iowa,  605 144,  167 

Central  Nat.  Bank  v.  New  Amsterdam  Nat.  Bank, 

128  App.  Div.  554 150 

Citizens'  Bank  v.  Lay,  80  Va.  436 151,  202 

National  Bank  v.  Richmond,  121  Mass.  110 207 

v.  Williams,  174  Pa.  St.  66 206 

Citizens'  State  Bank  v.  Cowles,  180  N.  Y.  340 98 

89  App.  Div.  281 97,  104 

City  Bank  of  Sherman  v.  Weiss,  68  Tex.  332 79 

Deposit  Bank  v.  Green,  130  Iowa,  384 97,    98 

of  Adrian  v.  Citizens'  Central  Nat.  Bank,  180  Mich.  171,  108 

Clapp  v.  Rice,  13  Gray,  403 134,  135 

Clark  v.  Cock,  4  East,  72 217 

v.  Seabright,  135  Pa.  St.  173 102 

v.  Sigourney,  17  Conn.  520 74 

v.  Pierce,  215  Mass.  552 28 

Clayton  Site  Co.  v.  Clayton  Drag  Co.,  147  Pac.  Rep.  460.213,  217 

Clemens  v.  Staunton  Co.,  61  Wash.  419 215 

Cline  v.  Miller,  8  Md.  274 67,  225 

Clutton  v.  Attenborough  (1895) ,  2  Q.  B.  707 32 

Coddington  v.  Bay,  20  Johns.  637 61,     63 

v.  Davis,  1  N.  Y.  186 186 

Coffin  v.  Tevis,  164  App.  Div.  314 103 

Cogswell  v.  Hayden,  5   Ore.   22 126 

Cole  Banking  Co.  v.  Sinclair,  34  Utah,  454 117 


XXXIV  TABLE   OF   CASES. 


PAGE 

v.  Cushing,  8  Pick.  48 107 

v.  Harrison,  167  App.  Div.  33G 106 

Coleman  v.  Carpenter,  9  Pa.  St.  178 176 

Collins  v.  Gilbert,  94  U.  S.  753 115 

Colonial  National  Bank  v.  Duerr,  108  App.  Div.  215 207,  209 

Col*  v.  Noble,  5  Mass.  167 168,  181 

Columbia  Distilling  Co.  v.  Reeh,  151  App.  Div.  128 209 

Knickerbocker  Trust  Co.  v.  Miller,  156  App.  Div.  810,  150 

v.  Miller,  215  N.  Y.  191..  195 
Columbian  Banking  Co.  v.  Bowen,  134  Wis.  218. .  .4,  144,  150,  250 

Comer  v.  Dufour,  95  Ga.  376 249 

Commercial  Bank  of  Kentucky  v.  Varnum,  49  N.  Y.  269.214,  231 

234 
&  Farmers'  Nat.  Bank  v.  First  Nat.  Bank,  30  Md. 

11   120 

National  Bank  v.  Armstrong,  148  U.  S.  50 79 

v.  Cititzens'  State  Bank,  132  Iowa, 

706 62 

v.  Hamilton  National  Bank,  42  Fed. 

Rep.  880 79 

v.  Henninger,  105  Pa.  St.  496 161 

v.  Hughes,  17  Wend.  94 161 

v.  Simpson,  90  N.  C.  469 200 

Security  Co.  v.  Jack,  29  N.  D.  67 106 

v.  Zimmerman,  185  N.  Y.  210... 7,  141 

142,  143 
v.  Citizens'  State  Bank,  132  Iowa, 

706 92 

Commonwealth  v.  Am.  Life  Ins.  Co.,  167  Pa.  St.  586 213 

Comstock  v.  Buckley,  141  Wis.  228 195 

v.  Hier,  73  N.  Y.  269 61 

Conant  v.  Johnston,  165  Mass.  450 115 

Condon  v.  Pearce,  43  Md.  83 131 

Congress  Brewing  Co.  v.  Habenicht,  83  App.  Div.  141 185 

Connors  v.  Taylor,  13  Wis.  224 125 

Conover  v.  Stillwell,  34  N.  J.  Law,  54 61 

Corrugating  Co.  v.  Taylor,  95  Kans.  562 220 

Consolidation  National  Bank  v.  Kirkland,  99  App.  Div.  121.97,    98 

Continental  Life  Insurance  Co.  v.  Barber,  50  Conn.  567 186 

v.  Townsend,  87  N.  Y.  8 97 

v.  Tradesmen's  National  Bank 

36  App.  Div.  112 121 


TABLE   OF   CASES.  XXXV 

PAGE 

Cook  v.  American  Tubing  and  "Webbing  Co.   (R  J.),  65  Atl. 

Rep.  641 116 

v.  Baldwin,  126  Mass.   317 217 

v.  Foraker,  193  Pa.  St.  461 179 

v.  Litchfield,  9  N.  Y.  279 172 

v.  Warren,  88  N.  Y.   37 187 

Cooke  v.  State  National  Bank,  52  N.  Y.  96 251 

Coolidge  v.  Brigkam,  5  Mete.  68 128 

v.  Ruggles,  15  Mass.  387 21 

Corbett  v.  Fetzer,  47  Neb.  269 81 

Corlies  v.  Howe,  11  Gray,  125 66 

Corn  Exchange  Bank  v.  American  Dock  &  Trust  Co.,  149  N. 

Y.  174 12 

Coruth  v.  Walker,  8  Wis.  252 233 

Costello  v.  Crowell,  127  Mass.  293 25 

Coster  v.  Thomason,  19  Ala.  717 175 

•Cottrell  v.  Watkins,  89  Va.  801 69,  96,  203 

Couch  v.  Waring,  9  Conn.  261 197 

Coulter  v.  Richmond,  59  N.  Y.  478 126 

County  of  Beaver  v.  Armstrong,  44  Pa.  St.  63 12 

Cover  v.  Meyers,  75  Md.  406 114,  133 

Covert  v.  Rhodes,  48  Ohio  St.  66 254 

Cowan  v.  Ramsey,  15  Ariz.  533 200 

Cowee  v.  Cornell,  75  N.  Y.  91 66 

Cowing  v.  Altman,  71  N.  Y.  441 35 

Cowles  v.  Harts,  3  Conn.   522 81 

v.  Horton,   3    Conn.   523 172 

v.  Peck,  55  Conn.  251 158 

Cowton  v.  Wickersham,  54  Pa.  St.  302 121 

Cox  &  Sons  Co.  v.  Northampton  Brewing  Co.,  245  Pa.  St.  418.     70 

Cox  v.  Citizens'  State  Bank,  73  Kans.  789 250 

v.  National  Bank,  100  U.  S.  713 140 

Crandall  v.  Rollins,  83  App.  Div.  618 54 

Craig  v.  Pala  Alto  Stock  Farm,  16  Idaho,  701.... 76,  80,  85,  114 

Crawford  v.  Millspaugh,  13  Johns.  87 199 

v.  Roberts,  8  Ore.  324 195 

v.  West  Side  Bank,  100  N.  Y.  50,  56 209 

Credit  Company  v.  Howe  Machine  Co.,  54  Conn.  357 103 

Crim  v.  Starkweather,  88  N.  Y.  339 146 

Critchlow  v.  Parry,  2  Camp.  182 131 

Critten  v.  Chemical  Nat,  Bank,  171  N.  Y.  219 40 

Croft's  Appeal,  42  Conn.  154 103 

Curtis  v.  Davidson,  215  N.  Y.  395 113,  133,  158 


XXXVI  TABLE    OF   CASES. 

PAGE 

Cromwell  v.  County  of  Sac,  96  U.  S.  60 112 

v.  Hynson,   2   Camp.   596 146 

Crosby  v.  Roub,  16  Wis.  616 75 

Crout  v.  DeWolf,  1  R.  I.  393 58 

Crowley  v.  Barry,  4  Gill.  194 152 

Cruger  v.  Armstrong,  3  Johns.  5 247 

Culbertson  v.  Nelson,  93  Iowa,  187 14 

Culver  v.  Reno  Real  Estate  Company,  91  Pa.  St.  367 70 

Cumberland  Bank  v.  Hann,  3  Harr.  222 88,  114 

Cummmings  v.  Kohn,  12  Mo.  App.  585 80 

Cunningham  v.  Scott,  90  Hun,  410 103 

Curran  v.  Witter,  68  Wis.  16 246 

Cuyler  v.   Stevens,  4  Wend.  566 171 

Dalrymple  v.  Hillenbrand,  62  N.  Y.  5 131 

Daniel  v.  Glidden,  38  Wash.  556 53 

Dann  v.  Norris,  24  Conn.  337 74 

Dart  v.  Sherwood,  7  Wis.  523 50 

Darwin  v.  Rippey,  63  N.  C.  318 210 

Davenport  v.  Palmer,  152  App.  Div.  761 252,  253 

Davis  v.  Clark,  85  N.  J.  L.  696 103 

v.  First  Nat.  Bank,  62  So.  Rep.  261 34 

v.  First  Nat.  Bank  of  Blakley,  68  So.  Rep.  261 75 

v.  Garr,  6  N.  Y.  124 31 

v.  McCall,  176  Mo.  App.  198 16 

v.  Miller,  14  Gratt.  1 96, 114,  202 

v.  Old  Colony  Railroad  Company,  131  Mass.  258 69 

v.  Schmidt,  126  Wis.  461 153 

v.  Wait,  12  Oregon,  425 67 

Sewing  Machine  Co.  v.  Best,  105  N.  Y.  59 41 

Dawson  v.  Wombles,  123  Mo.  App.  340 60 

Dav  v.  Ridgway,  17  Pa.  St.  303 133 

Deahy  v.  Choquet  (R.  L),  67  Atl.  Rep.  421 126 

Debedian  v.  Gala,  64  Md.  262 35 

Deering  v.  Creighton,  19  Ore.  118 126 

De  Houst  v.  Lewis,  128  App.  Div.  131 249,  250 

DeGroat  v.  Focht,  37  Okla.  267 22 

De  la  Torre  v.  Barclay,  1  Stark.  308 191 

DeLaVergne  v.  Globe  Printing  Co.,  148  Pac.  Rep.  922 150 

Delaware  County  Trust  Co.  v.  Title  Ins.  Co.,  199  Pa.  St.  17 200* 

Demelman  v.  Brazier,  193  Mass.  458 4,  192 

Denninger  v.  Miller,  7  App.  Div.  409 174 

Denniston  v.  Stewart,  17  How.  (U.  S.)  606 231 


TABLE   OF   CASES.  XXXVU 

PAGE 

Deposit  Bank  of  Georgetown  v.  Fayette  National  Bank,  90  Ky. 

10 121 

Derham  v.  Donohue,  155  Fed.  Rep.  385 171,  172 

Des  Moines  Savings  Bank  v.  Arthur,  163  Iowa,  205 21 

Dewees  v.  Middle  States  Coal  &  Iron  Co.,  248  Pa.  St.  202 140 

De  Witt  v.  Walton,  9  N.  Y.  574 51 

Deyo  v.  Thompson,  53  App.  Div.  (N.  Y.)  12 245 

Dickens  v.  Beal,  10  Pet.  572 153 

v.  Hall,  87  Pa.  St.  379,  380 183 

Dier  v.  Bank,  129  Tenn.  89 199 

Dietrich  v.  Boylie,  23  La.  Ann.  767 15 

Dillenbeck  v.  Bygert,  97  N.  Y.  303 203 

Diilon  v.  Bron,  150  Pac.  Rep.  553 154 

Dominion  Trust  Co.  v.  Hildner,  243  Pa.  St.  253 140 

Dinsmore  v.  Duncan,  57  N.  Y.  573 27 

Dodd  v.  Denny,  6  Oregon,  156 29 

v.  Jette,  10  Oregon,  31 247 

Dodson  v.  Taylor,  56  N.  J.  Law,  11 172,  174 

Dolph   v.   Rice,  18  Wis.   397 248 

Dorsey  v.  Wellman,  85  Neb.  262 8 

v.  Wolff,  142  111.  589 15 

Dotson  v.  Owsley,  141  Ky.  452 '. 8 

Doubleday  v.  Kress,  50  N.  Y.  410 146 

Dounes  v.  Church,  13  Peters,  205 243 

Downey  v.  O'Keefe,  26  R.  I.  571 4 

Draper  v.  Clemens,  7  Mo.  52 149 

Dresser  v.  Missouri,  etc.,  R.  R.  Construction  Co.,  93  U.  S.  95 . .  101 

Drew  v.  Towle,  7  Frost,  412 67 

Drum  v.  Drum,  133  Mass.  566 208 

Du  Bosque  v.  Munroe,  168  App.  Div.  821 59 

Ducket  v.  Von  Lillienthal,  11  Wis.  56 233,  234 

Dull  v.  Bricker,  76  Pa.  St.  255 219 

Dunbar  Box  &  L.  Co.  v.  Martin,  53  Misc.  312 55 

Dunbrow  v.  Gelb,  72  Misc.  400 209 

DuPont  de  Numour  Powder  Co.  v.  Rooney,  63  Misc.  344 183 

Durkin  v.  Cranston,  7  Johns.  442 242 

Dye  v.  Scott,  35  Ohio  St.  194 186 

Dykman  v.  Northridge,  1  App.  Div.  26 150,  235 

Easterly  v.  Barber,  66  N.  Y.  433 134,  135 

Eaton  v.  Libbey,  165  Mass,  218 61 

v.    McMahon,   42   Wis.   484 133,155 

Eekert   v.   Cameron,  7  Wright,  120 194 


XXXV111  TABLE   OF   CASES. 

PAGE 

Edelen  v.  White,  6  Bush.  408 135 

Edelman  v.  Rams,  58  Misc.  561 247 

Edgerton  v.  Edgerton,  8  Conn.  6 27 

Edis  v.  Bury,  6  Barn.  &  Cress.  433 49 

Egbert  v.  Hanson,  34  Misc.  597 134 

Eilbert  v.  Finkbeiner,  68  Pa.  St.  243 126 

Eisenberg  v.  Lefkowitz,  142  App.  Div.  570 115 

Electric  Mfg.  Co.  v.  Hodge,  181  Mo.  App.  232 190 

Elgin  City  Banking  Co.  v.  Hall,  108  S.  W.  Rep.  1068.62,  81,  97,     98 

Elias  v.  Whitney,  50  Misc.  326 95 

Elk  Valley  Coal  Co.  v.  Third  Nat.  Bank,  157  Ky.  617.... 64,     65 

Ellicott  v.  Martin,  6  Md.  509 93,  115 

Elliot  v.  Chestnut,  30  Md.  562 38 

Ellis  v.  Ins.  Co.,  4  Ohio  St.  628 121 

Elmore  County  Bank  v.  Avaunt,  66  So.  Rep.  509 98 

Emanuel  v.  Misicki,  149  N.  Y.  Supp.  905 110 

Emm  v.  Carroll,  1  Yerger,  144 53 

Ensign  v.  Fogg,  177  Mich.  317 98,  210,  123,  206 

Epler  v.  Funk,  8  Pa.  St.  468 81 

Equitable  Trust  Co.  v.  Taylor,  146  App.  Div.  424 18 

Ernst  v.  Steckman,  74  Pa.  St.  13 20 

Espy  v.  Bank  of  Cincinnati,  18  Wall.  620 247 

Estate  of  Chismore,  166  Iowa,  217 12,    52 

Etting  v.  Schuykill  Bank,  2  Pa.  St.  355 172,  181 

Evans  v.  Freeman,  142  N.  C.  61 76 

Ewing  v.  Citizens'  Nat.  Bank,  162  Ky.  551 218 

Exchange  Bank  v.  Robinson,  185  Mo.  App.  582 40 

Ex  Parte  Barclay,  7  Ves.  597 168 

Goldberg  v.  Lewis,  76  So.  Rep.  839 4,    96 

Moline,  19  Ves.  216 176 

Fair  v.  Howard,  6  Nev.  304 61 

Faircloth-Byrd  Merc.  Co.  v.  Adkinson,  167  Ala.  344 217 

Fairfield  Nat.  Bank  v.  Hammer,  95  Atl.  Rep.  31,207 96 

Falkill  National  Bank  v.  Sleight,  1  App.  Div.  189 199 

Fall  River  Union  Bank  v.  Willard,  5  Metclf.  216 149 

Fancourt  v.  Thorne,  9  Q.  B.  312 23 

Farmers'  Bank  v.  Ewing,  78  Ky.  264 186 

Bank  v.  First  Nat.  Bank,  164  Ky.  548 103 

Bank  v.  Sprigg,  11  Md.  390 197 

etc.,  Bank  v.  Troy  City  Bank,  1  Dough.  457 85 

and   Mechanics'   Bank   v.   Butchers'   and   Drovers' 
Bank,  16  N.  Y.  125 69 


TABLE   OF   CASES.  XXXIX 

PAGE 

Farmers'  and  Mechanics'  Bank  v.  Empire  Stone  Dressing  Co., 

5  Bosw.  275 69,  251 

and  Merchants'  Bank  v.  Bank  of  Rutherford,  115 

Tenn.  64 83,  131 

Loan  &  Trust  Co.  v.  Planck,  152  N.  W.  Rep  390 13 

Nat.  Bank  v.  Farmers'  Bank  of  Maysville,  159  Ky. 

141 120 

National  Bank  v.  Venner,  192  Mass.  531 140 

Farnsworth  v.  Allen,  4  Gray,  453 146 

v.  Burdick,  94  Ivans.  749 76 

Farquhar  Co.  v.  Higham,  16  N.  D.  106 5,  127 

Far  Rockaway  Bank  v.  Norton,  186  N.  Y.  484 126 

Fassler  v.  Streit,  92  Neb.  786 8 

Fassin  v.  Hubbard,  55  N.  Y.  465 81,  174 

Feigenspan  v.  McDonnell,  201  Mass.  341 175 

Felt  v.   Bush,  41   Utah,  467 64 

Ferguson  v.  Netter,  141  App.  Div.  274 66 

Fidelity  Trust  Co.  v.  Ellen,  163  N.  C.  545 116 

v.  Whitehead,  165  N.  C.  74 116 

Field  v.  Nickerson,  13  Mass.  131 100 

Fifth  Ward  Savings  Bank  v.  First  National  Bank,  48  N.  J. 

Law,  513 103 

Fifth  Nat.  Bank  v.  McCrory,  177  S.  W.  Rep.  1058 ..    ..     65 

Finch  v.  Calkins,  183  Mich.  298 151,    88 

Finley  v.  Smith,  177  S.  W.  Rep.  262 24,    52 

Filton  v.  The  Miller  Brewing  Co.,  38  N.  Y.,  St.  Rep.  602 69 

First  Bank  of  Notasulga  v.  Jones,  156  App.  Div.  277. . 132 

Nat.  Bank  v.  Baker,  163  App.  Div.  72 141,  185 

v.  Buckhannon  Bank,  80  Ind.  475 249 

v.  Bynum,  84  N.  C.  24 15 

v.  Bank  of  Cottage  Grove,  59  Ore.  388 120 

v.  Bertoli,  88  Vt.  421 8 

v.  Bickel,  143  Ky.  757 123,    76 

v.  Clark,  61  Md.  400 220 

v.  Falkenham,  94  Cal.  141 186 

v.  Fleitmann,  168  App.  Div.  75 16 

v.  Gray,  63  Mo.  38 15 

v.  Gridley,  112  App.  Div.  398. . .  .84, 131,  208,  210 

v.  Hall,  44  N.  Y.  395 85 

v.  Harris,  7  Wash.  139 199,  203 

v.  Home  Ins.  Co.,  16  N.  M.  66 215 

v.  Larsen,  60  Wis.  206 15 

v.  Lewis,  57  Colo.  125 13 


Xl  TABLE   OF   CASES. 


PAGE 

First  Nat.  Bank  v.  Maxfield,  83  Me.  576 203 

v.  Meyer,  152  N.  W.  Rep.  657 5,  119,  200 

v.  Michael,    96  N.  C.  53 17 

v.  Miller,  139  Wis.   126 4,    16 

v.  Moore,  148  Fed.   Rep.   953 115 

v.  Muskogee  Pipe  Lime  Co.,  40  Okla.  603.218,  220 
v.  Northwestern  National  Bank,  152  111.  296  252 

v.  Peltz,  176  Pa.  St.  513 197 

v.  Ricker,  71  111.  439 121 

v.  Robbins,  168  N.  C.  473 48 

v.  Scoggins,  41  Okla.  719 210 

v.  Schreiner,  110  Pa.  St.  188 186 

v.  Stallo,  160  App.  Div.  702 46,  59,     93 

v.  St  am,  186  Mo.  App.  436 16,     90 

v.  Starr  Watch  Case  Co.,  153  N.  W.  Rep. 

722 179 

v.  Tustin,  246  Pa.  151 187 

v.  Wallis,  150  N.  Y.  455 53 

v.  Whitman,  94  U.  S.  343 254 

v.  Williams,  164  Ky.  143 166 

v.  Wood,  71  N.  Y.  405 158 

of  Champlain  v.  Woods,  128  N.  Y.  35 114 

Danvers  v.  First  National  Bank  of  Sa- 
lem, 151  Mass.  280 121 

Elgin  v.  Russell,  124  Tenn.  618 22,    26 

Hutchinson  v.  Lightner,  74  Kans.  736 .     17 

Louisville  v.  Bickel,  154  Ky.  11 166 

Murfreesboro   v.   First   Nat.  Bank   of 
Nashville,  154  S.  W.  Rep.  965.218,  221, 

227 
Omaha  v.  Whitmore,  177  Fed.  Rep. 

397 222,  227 

Pomeroy  v.  Buttery,  17  N.  D.  326.  .22    85 

90 
Portland    v.    Linn     County    National 

Bank,  30  Oregon,  296 249 

Union  Mills  v.  Clark,  134  N.  Y.  368. .  254 
Wilkesboro  v.  Barnum,  160  Fed.  Rep. 

245 41 

Wymore  v.  Miller,  43  Neb.  791 249 

First  State  Bank  v.  Williams,  164  Ky.  143 4,  119,  200,  20S 

Firth  v.  Thrush,  8  Barn.  &  Cress,  387 174 

Fisher  v.  Fisher,  98  Mass.  303 61,     65 

Fishburn  v.  Lauderslausen,  50  Ore.  364 91 


TABLE   OF   CASES.  xli 


PAGE 

Fisher  v.  0  'Hanlon,  93  Neb.  529 21 

Fitckburg  Bank  v.  Greenwood,  2  Allen  434 81 

Fitzgerald  v.  Booker,  96  Mo.  661 61 

Flagg  v.  School  District,  4  N.  D.  30 14 

Florence  Mills  Co.  v.  Brown,  124  U.  S.  385 254 

Florence  Oil  Co.  v.  First  National  Bank,  38  Colo.  119 140 

Foland  v.  Boyd,  23  Pa.  St.  476 175 

Folger  v.  Chase,  18  Pick.  63 75,    85 

Fonner  v.  Smith,  31  Neb.  107 254 

Fonseca  v.  Hartman,  84  N.  Y.  Supp.  131 183,  187 

Ford  v.  Mitchell,  15  Wis.  304 28 

Forest  v.  Safety  Banking  &  Trust  Co.,  174  Fed.  Rep.  345 246 

Foster's  Adm'r  v.  Metcalf,  144  Ky.  385 90 

Foster  v.  Hill,  36  N.  H.  526 84 

Fourth  National  Bank  v.  Henschuk,  25  Mo.  207 152,  175 

Fourth  Nat.  Bank  v.  Snead,  216  Mass.  521 123,  126 

Street  National  Bank  v.  Yardley,  165  U.  S.  634 254 

Fowler  Paper  Co.  v.  Great  Jones  S.  B.  Co.,  183  111.  App.  310. .  146 

Fox  v.  Rural  Home  Co.,  90  Hun,  365 70 

Frampton  v.  Coulson,  1  Wils.  33 139 

France  v.  Schiro,  136  La.  842 66 

Frank  v.  Lillienfeld,  33  Gratt.  377 38,  103 

Franklin  Bank  v.  Roberts,  168  N.  C.  473 62 

v.  Lynch,  52  Md.  270 220 

v.  Twogood,  Iowa,  515 76 

Frazee  v.  Phoenix  Nat.  Bank,  161  Ky.  175 142,  166 

Frazer  v.  D  'Quiller,  2  Pa.  St.  200 12 

Frederick  v.  Spokane  Grain  Co.,  47  Wash.  85 217 

Freeman  v.  Boynton,  7  Mass.  483 149 

Freeman's  Bank  v.  National  Tube  Works,  151  Mass  413 -79 

Freese  v.  Brownell,  35  N.  J.  Law,  285 87 

French  v.  Bank  of  Columbia,  4  Cranch,  141 190 

v.  Jarvis,  29  Conn.  347 202 

v.  Turner,  15  Ind.  59 76 

Fridenberg  v.  Robinson,  14  Fla.  130 199 

Friend  v.  Wilkinson,  9  Gratt.  31 179 

Frits  v.  Kirchdorfer,  136  Ky.  643 119 

Fuller  v.  Green,  64  Wis.  159 2U 

Fulton  v.  MacCracken,  18  Md.  528 232 

Fund  v.  Lewis,  34  Fla.  424 242 

Gahren  v.  Parkersburg  Nat.  Bank,  157  Ky.  266 151 

Galbraith  v.  Shepard,  43  Wash.  698 140,  157,  167 

Garland  v.  Salem  Bank,  9  Mass.  408 185 


Xlil  TAttLE   OF   CASES. 


PAGE 

Garnett  v.  Woodcock,  1  Starkie,  475 150 

Garrard  v.  Hadden,  67  Pa.  St.  82 40 

v.  Lewis,  L.  R.  10  Q.  B.  Div.  30 39,    47 

Garvin  v.  Wiswell,  83  111.  218 75,  134 

Gates  v.  Beecher,  60  N.  Y.  518 147, 152,  175 

City  Bank  v.  Schmidt,  167  Mo.  App.  153 8 

Gawkins  v.  De  Loraine,  3  Wills,  207 19 

Gawtry  v.  Doane,  48  Barb.  148 184 

Gaylord  v.  Van  Loan,  15  Wend.  308 29 

Geary  v.  Physic,  5  Barn  &  Cress.  234 11 

Gennis  v.  Weighley,  114  Pa.  St.  194 197 

Georgia  National  Bank  v.  Henderson,  46  Ga.  496 248 

German- American  Bank  v.  Cunningham,  97  App.  Div.  244.  .103,  115 

v.  Mills,  99  App.  Div.  312 7,  142,  143 

v.  Millwan,  31  Misc.  87 151 

v.  Niagara  Cycle   Co.,  13  App.  Div. 

450 158,  199 

v.  Wright,  148  Pac.  Rep.  769 64 

State  Bank  v.  Lyons,  127  Minn.  390 64 

National  Bank  v.  Forman,  138  Pa.  St.  474 161 

George  v.  Bacon,  138  App.  Div.  208 135 

Germania  National  Bank  v.  Mariner,  129  Wis.  544 49 

v.  Tooke,  101  N.  Y.  442 219 

Gettysburg  National  Bank  v.  Chisholm,  169  Pa.  St.  564.. 206,  207 

209 

Giffert  v.  West,  37  Wis.  115 128 

Gifford  v.  Hardell,  88  Wis.  538 249 

Gilbert  v.  Adams,  146  App.  Div.  864 21 

Gill  v.  Palmer,  29  Conn.  57 171 

Gilley  v.  Harrell,  118  Tenn.  115 13 

Gilmore  v.  Wilbur,  12  Pick.  124 7 

Gilpin  v.  Savage,  201  N  Y.  167 149 

Giovanovich  v.  Citizens'  Bank,  26  La.  Ann.  15 61 

Glaser  v.  Rounds,  16  R.  I.  235 184 

Gleason  v.  Hamilton,  138  N.  Y.  353 207 

v.  Thayer,  87  Conn.  248 5,  80,  167,  181,  187 

Glennan  v.  Rochester  Trust  &  S.  D.  Co.,  209  N.  Y.  12 250 

Glidden  v.  Chamberlain,  167  Mass.  486 87,  131 

Gloucester  Bank  v.  Worcester,  10  Pick.  528 197 

Goldman  v.  Goldberger,  208  Fed.  Rep.  877 135 

Good  v.  Martin,  95  U.  S.  93 125 

Goodner  v.  Maynard,  7  Allen,  456 200,  202 

Goodnow  v.  Warren,  122  Mass.  82 175 


TABLE   OF   CASES.  xlili 


PAGE 

Ooolrick  v.  Wallace,  154  Ky.  596 81 

Gordon  v.  Levine,  194  Mass.  418 Ill,  145,  250 

Goshen  National  Bank  v.  Bingham,  118  N.  Y.  349 91 

Gosling  v.  Griffin,  85  Tenn.  737 164 

Goss  v.  Nelson,  1  Burr.  226 22 

Gould  v.  Eager,  17  Mass.  615 202 

Goupy  v.  Harden,  7  Taunt.  397 227 

Gowan  v.  Jackson,  20  Johns.  176 227 

Gowdey  v.  Robbins,  3  App.  Div.  353 206 

Graham  v.  Smith,  155  Mich.  65 64 

County   State  Bank  v.   Northwestern  Land  Co.,  28 

N.  D.  479 52 

Grand  Bank  v.  Blanchard,  23  Pick.  305 150 

Grange  v.  Reigh,  93  Wis.  552 249 

Grant  v.  Fleming,  46  Pa.  St.  140 81 

v.  Wood,  12  Gray,  220 21 

Gray's  Admr.  v.  Bank  of  Kentucky,  29  Pa.  St.  365 102 

Grayson  County  Bank  v.  Elbert,  143  Ky.  753 170,  174 

Grebe  v.  Swords,  28  N.  D.  330 116 

Green  v.  Gunsten,  154  Wis.  69 Ill 

Greenfield  Savings  Bank  v.  Stowell,  123  Mass.  196 40 

Greenwich  Bank  v.  De  Groot,  7  Hun,  210 188 

Gregg  v.  Bean,  69  Vt.  22 249 

Griffin  v.  Erskine,  131  Iowa,  444 85 

Griffiths  v.  Kellogg,  39  Wis.  290 45 

v.  Shipley,  74  Md.  591 115 

Grissom  v.  Commercial  Bank,  87  Tenn.  350 161 

Greer  v.  Orchard,  175  Mo.  App.  494 99 

Griswold  v.  Davis,  125  Tenn.  229 162 

Guano  Company  v.  Marks,  135  N.  C.  59 194 

Guarantee  Co.  v.  Craig,  155  Pa.  St.  343 197 

Guerrant  v.  Guerrant,  7  Va.  Law  Reg.  637 42 

Guild  v.  Goldsmith,  9  Fla.  212 142,  143 

Gunston  v.  Heat  and  Power  Co.,  181  Pa.  St.  327 121 

Hacket  v.  First  Nat.  Bank,  114  Ky.  193 40 

Haddock,  Blanchard  &  Co.,  Inc.  v.  Haddock,  192  N.  Y.  499.  126 

127,  136 

Hagerty  v.  Phillips,  83  Me.  336 135 

Hagey  v.  Hill,  75  Pa.  St.  108 200 

Hague  v.  Davis,  8  Gratt.  4 134 

Haines  v.  Dubois,  29  N.  J.  Law,  259 74 

v.  Merrill,  56  N.  J.  Law,  312 115 

Hale  v.  Danforth,  46  Wis.  554 135,  156 


Xliv  TABLE   OF   CASES. 


PAGE 

Halifax  v.  Lyle,  3  Welsby,  H.  &  G.  446 121 

Hall  v.  Auburn  Turnpike  Co.,  27  Cal.  256 69 

v.  Cordell,  142  U.  S.  116 217 

v.  Crane,  213  Mass.  326 186 

v.  Toby,  110  Pa.  St.  318 29,    76 

Hallen  v.  Davis,  59  Iowa,  444 39 

Halliday  v.  Hart,  30  N.  Y.  474 199 

v.  McDougall,  20  Wend.  81 231,  233 

Haly  v.  Brown,  5  Pa.  St.  178,  182 181,  182,  188,  189 

Ham  v.  Merritt,  150  Ky.  11 104 

Hamilton  v.  Diefenderf er,  21  Wyo.  66 60 

v.  Hamilton,  127  App.  Div.  871 246 

Hampton  v.  Miller,  78  Conn.  267 142 

Hanna  v.  McGrory,  141  Pac.  Rep.  996 18,  193,  200,  217 

Hanover  National  Bank  v.  American  Dock  &  Trust  Co.,  148 

N.  Y.  612 12 

Hansborough  v.  Gray,  3  Gratt.  340 140 

Harger  v.  Wilson,  63  Barb.  237 112 

Harker  v.  Anderson,  21  Wend.  373 247 

Harmon  v.  Haggerty,  88  Tenn.  705 257 

Hardon  v.  Dixon,  77  App.  Div.  241 151 

Harris  v.  Clark,  3  N.  Y.  93 213,  247 

v.  Johnson,  89  Conn.  128 104,  116 

v.  The  Bank  of  Jacksonville,  20  Fla.  501,  512 206 

Harrison  v.  Ruscoe,  15  L.  H.  Exch.  110;  15  M.  &  W.  231. . . .  168 

v.  Nicollet  National  Bank,  41  Minn.  488 247,  248 

Harrold  v.  Kays,  64  Mich.  439 61 

Hart  v.  Stickney,  41  Wis.  630 97 

Hartford  Bank  v.  Stedman,  3  Conn.  494 188 

v.  Greenwich  Bank,  215  N.  Y.  726 33 

Hartington  Nat.  Bank  v.  Breslin,  88  Neb.  47 4,     39 

Hartley  v.  Carboy,  150  Pa.  St.  52 207 

Haskell  v.  Boardman,  8  Allen,  38 185 

v.  Brown,  65  111.  29 76 

v.  Jones,  86  Pa.  St.  173 257 

Hastings  v.  Thompson,  54  Minn.  184 14 

Hathaway  v.  County  of  Delaware,  185  N.  Y.  374 76,  91,     94 

Hawkins  v.  Young  (Iowa),  114  N.  W.  Rep.  1041 117 

Hawley  v.  Jette,  10  Oregon,  31 155 

Hay  den  v.  Speakman,  150  Pac.  Rep.  292 163 

Hayes  v.  Werner,  45  Conn.  252 142 

Haynes  v.  Birks,  3  Bor.  &  Pul.  599 168 

Heard  v.  Dubuque  Bank,  8  Neb.  10 15 


TABLE   OF   CASES.  xlv 


PAGE 

Hegeman  v.  Moon,  131  N.  Y.  462 21 

Heise  v.  Bumpass,  40  Ark.  547 40 

Heist  v.  Hart,  73  Pa.  St.  286 75 

Henderson  v.  Thornton,  37  Miss.  448 122 

Henry  Christian  Building  and  Loan  Association  v.  Walton,  187 

Pa.   St.  201 58 

Hentz  v.  Nat.  City  Bank,  159  App.  Div.  743 251,  254 

Herdic  v.  Roessler,  109  N.  Y.  127 256 

Hereth  v.  Meyer,  33  Ind.  511 is 

Herker  v.  Anderson,  21  Wend.  372 248 

Herman  v.  Comles,  119  Md.  41 66 

Hermann  Lumber  Co.  v.  Djurstrom,  74  Misc.  93 170 

Herriek  v.  Whitney,  15  Johns.  240 128 

v.  Wolverton,  41  N.  Y.  581 141 

Heuertematte  v.  Morris,  101  N.  Y.  63 63,  122 

Hewins  v.  Cargill,  67  Me.  554 554 

Hibbs  v.  Brown,  190  N.  Y.  167 If) 

Hibernia  Bank  v.  Lacomb,  84  N.  Y.  367 140,  246 

Hibernia  Bank  &  Trust  Co.  v.  Dresser,  132  La.  532.  .21,  22,  24,  123 

Hibles  v.  Guaraglia,  75  N.  J.  L.  168 126 

Hiekok  v.  Bunting,  92  App.  Div.  167 60 

Hilborn  v.  Pennsylvania  Cement  Co.,  145  App.  Div.  442 12 

Hill  v.  Buchanan,  71  N.  J.  Law,  301 202 

v.  Dillon,  176  Mo.  App.  192 116 

v.  Farrell,  3  Greenleaf,  233 188 

v.  Hall,  191  Mass.  253 45 

Hills  v.  Place,  48  N.  Y.  520 139,  140 

Hickley  v.  Merchants'  National  Bank,  131  Mass.  147 117 

Hinsdale  v.  Miles,  5  Conn.  331 236 

Hobbs  v.  Straine,  149  Mass.  212 187 

Hodge  v.  Wallace,  129  Wis.  84 14 

v.  Smith,  130  Wis.  326 43,  45,  102,  116 

Hodgens  v.  Jennings,  148  App.  Div.  879 124,  136 

Hodges  v.  Shuler,  22  N.  Y.  114 26,  171 

Hodgins  v.  Northwestern  Finance  Co.,  148  Pac.  Rep.  717 72 

Hoffman  v.  Planters'  National  Bank,  99  Va.  480 210 

Holbrook  v.  Burt,  22  Pick.  555 7 

Holcomb  v.  Wyckoff,  35  N.  J.  Law,  38 112 

Holdsworth  v.  Hunter,  10  C.  &  B.  449 243 

Holmes  v.  Roe,  62  Mich.  109 249 

v.  Trumper,  22  Mich.  427 40 

v.  West,  17  Cal.  623 29 

Holliday  State  Bank  v.  Hoffman,  85  Kas.  71 4,  21,     24 


Xlvi  TABLE   OF   CASES. 

PAGE 

Hollowell  v.  Curry,  41  Pa.  St.  322 150 

Holtz  v.  Boppe,  37  N.  Y.  634 147 

Holzbog  v.  Bakrow,  15G  Ky.  161 66,  109 

Home  Insurance  Company  v.  Green,  19  N.  Y.  518 172 

National  Bank  v.  Newton,  8  Bradwell,  563 161 

Savings  Bank  v.  Stewart  (Neb.),  110  N.  W.  Rep.  947. .  164 

Homer  v.  Wallis,  11  Mass.  310 211 

Hook  v.  Pratt,  78  N.  Y.  371 79 

Hopkins  v.  Commercial  Bank,  64  Fla.  310 123 

Hopkinson  v.  Foster,  L.  R.  18  Eq.  74 247,  254 

Horan  v.  Mason,  141  App.  Div.  89 115 

Hornstein  v.  Cifuno,  86  Neb.  103 48 

Horowitz  v.  Wollowitz,  59  Misc.  520 Ill,  132 

Hotchkiss  v.  First  National  Bank,  21  Wall.  354 115 

v.  Fitzgerald  Patent,  etc.,  Co.,  41  W.  Va.  357 61 

House  v.  Vinton  Bank,  43  Ohio  St.  346 176 

Houser  v.  Fayssoux,  168  N.  C.  1 166 

Howard  v.  Boorman,  17  Wis.  459 70 

v.  Ives,  1  Hill,  263 181 

Howe  v.  Merrill,  15  Cush.  88 134 

Howland  v.  Adrian,  29  N.  J.  Law,  41 171 

v.  Carson,  15  Pa.  St.  453 220 

Hubbard  v.  Gurney,  64  N.  Y.  450 199 

v.  Matthews,  54  N.  Y.  43 175 

Huff  v.  Wagner,  63  Barb.  230 112 

Huffuker  v.  National  Bank,  12  Bush.  293 233 

Hughes  v.  Large,  2  Pa.  St.  103 114 

Humphreys  v.  Sutcliffe,  192  Pa.  St.  336 151 

Hungerford  v.  O'Brien,  37  Minn.  306 167 

Hunter  v.  Allen,  127  App.  Div.  572 39,    95 

v.  Harris,  63  Ore.  505 119,  135,  200 

v.  Van  Bomhurst,  1  Md.  504 172 

Hutchinson  v.  Boggs  &  Kirk,  28  Pa.  St.  294 115 

Hutchison  v.  Crutcher,  98  Tenn.  421 151 

Industrial  Bank  of  Chicago  v.  Bower,  165  111.  70 249 

Trust  Title  and  Savings  Co.  v.  Weakley,  103  Ala. 

458 249 

Ingalls  v.  Lee,  9  Barb.  647 87 

Ingersoll  v.  Martin,  58  Md.  67 66 

In  re  Bishops'  Estate,  195  Pa.  St.  85 199 

McCord,  174  Fed.  Rep.  72 134 

Moritz  Estate,  239  Pa.  St.  375 200 

Philpott's  Estate,  151  N.  W.  Rep.  825 95,  142 

Young's  Estate,  234  Pa.  St.  287 129,  132 


TABLE   OF   CASES.  Xlvii 


PACK 

Insurance  Company  v.  Wilson,  29  W.  Va.  543 140 

Interboro  Brewing  Co.  v.  Doyle,  165  App.  Div.  646 103,  115 

Interstate  Finance  Co.  v.  Schroder,  74  W.  Va.  67 66 

Iowa  State  Bank  v.  Claypool,  91  Kans.  251 38 

Ireland  v.  Floyd,  42  Okla.  609 76 

v.  Scharpenberg,  54  Wash.  558 90 

v.  Shore,  91  Kans.  326 16,  11 7 

Iron  City  Nat.  Bank  v.  Ft.  Pitt.  Nat.  Bank,  159  Pa.  St.  46. . .  121 

City  National  Bank  v.  Rafferty,  207  Pa.  St.  238 50 

Clad  Mfg.  Co.  v.  Sackin,  129  App.  Div.  555 147 

Isnard  v.  Torres,  10  La.  Ann.  23 40 

Ivory  v.  Bank  of  the  State,  36  Mo.  475 248 

Izzo  v.  Ludington,  79  App.  Div.  272 217 

Jackson  v.  Myers,  43  Md.  452 , 27 

v.  Richards,  2  Caines,  343 155 

Jacobus  v.  Jamestown,  Mantel  Co.,  211  N.  Y.  154,  149  A.  D. 

356 69,  70,    96 

James  v.  Brown,  11  Ohio,  601 29 

Jameson  v.  Swinton,  2  Taunt.  224 181 

Jamieson  v.  McFarland,  43  Wash.  153 57 

Jarnigan  v.  Stratton,  95  Tenn.  619 175 

Jarvis  v.  Manhattan  Beach  Co.,  148  N.  Y.  652 103 

v.  St.  Croix  Manufacturing  Co.,  23  Me.  287 179 

v.  Wilson,  46  Conn.  91 219 

Jefferson  Bank  v.  Chapman,  122  Tenn.  415 104,  107,  112 

Jeffrey  v.  Rosenfeld,  179  Mass.  506 207 

Jenkins  v.  Schnaub,  14  Wis.  1 61 

v.  White,  147  Pa.  St.  303 185 

Jenkinson  v.  Wilkinson,  110  N.  C.  532 91 

Jennings  v.  Wall,  217  Mass.  278 72 

Jensen  v.  Wilself,  36  Nev.  37 132,  246 

Jerman  v.  Edwards,  29  App.  Cases,  D.  C.  535 89 

Jett  v.  Standafer,  143  Ky.  787 56 

Johnson  v.  Brown,  154  Mass.  105 180,  233 

v.  Buffalo  Center  State  Bank  (Iowa),  112  N.  W.  Rep. 

165 85 

v.  Clark,  39  N.  Y.  216 220 

v.  Lassiter,  155  N.  C.  47 3,     34 

v.  Mitchell,  50   Tex.   212 83 

v.  Ramsey,  43  N.  J.  Law,  279 135 

Johnston  v.  Hoover,  139  Iowa,  143 38 

Jones  v.  Council  Bluffs  Branch,  etc.,  34  111.  313 217 

v.  Darch,  4  Price,  300 121 


Xlviii  TABLE   OF   CASES. 

PAGE 

Jones  v.  Home  Furnishing  Co.,  9  App.  Div.  103 119 

v.  Roberts,  191  Pa.  St.  152 185 

v.  Rodetz,  27  Minn.  240 15 

Jordan  v.  Grover,  99   Cal.  194 115 

v.  Tate,  19  Ohio  St.  586 20 

Marsh  Co.  v.  Nat.  Shawmut  Bank,  201  Mass.  307 33 

Joseph  v.  Solomon,  19  Fla.  623 214,  231 

Josephson  v.  Gens,  85  Misc.  372 204 

Joy  v.  Diefendorf,  130  N.  Y.  6 115,  116 

Joyce  v.  Realm  Insurance  Company,  L.  R.  7  Q.  B.  580 48 

Judah  v.  Harris,  19  Johns.  144 28 

Jump  v.  Sparling,  218  Mass.  324 54,    55 

Jurgens  v.  Wichmann,  124  App.  Div.  (N.  Y.)  531. . .  .177,  181,  183 

Justice  v.  Stonecipher,  267  111.  448 116 

Kaschner  v.  Conklin,  40  Conn.  81 203 

Keenan  v.  Blue,  240  111.  177 33 

Keene  v.  Behan,  40  Wash.  505 101,  116 

Keifer  v.  Talbert,  128  Minn.  519 90 

Keith  v.  Jones,  9  Johns.  120 28 

Kelley  v.  Brown,  5  Gray,  108 185 

v.  Whitney,  45  Wis.  110 35 

Kelly  v.  Burroughs,  102  N.  Y.  93 134,  203 

Kennedy  v.  Broderick,  216  Fed.  Rep.  137 25 

Kenworthy  v.  Sawyer,  125  Mass.  28 200,  203 

Kerby  v.  Ruegamer,  107  App.  Div.  491 54 

Kerr  v.  Anderson  (N.  D.),  Ill  N.  W.  Rep.  614 115 

v.  Smith,  156  App.  Div.  807 1 

Keyes  v.  Feustomacher,  24  Cal.  329 29 

Kilcresse  v.  White,  6  Fla.  45 114 

Kilgore  v.  Bulkley,  14  Conn.  362 170 

Kimball  v.  Bryan,  56  Iowa,  632 153 

Kimpton  v.  Studebaker,  14  Idaho,  552 19 

King  v.  Bellamy,   82  Kans.   301 89 

v.  Bowling  Green  Trust  Co.,  145  App.  Div.  398 63 

v.  Doane,  139  U.  S.  166 115 

v.  Holmes,  11  Pa.  St.  456 148 

Kingsley  v.  Sampson,  100  111.  54 48 

Kinney  v.  Kruse,  28  Wis.  183 101,  114,  117 

Kinsley  v.  Robinson,  21  Pick.  327 153 

Kipp  v.  Smith,  137  Wis.  234 106 

Kirschner  v.   Conklin,  40  Conn.   77 134 

Kiskadden  v.  Allen,  7  Colo.  206 20 

Klar  v.  Kostiuk,  65  Misc.  199 110 


o 


TABLE   OF   CASES.  xllX 

PACK 

Klauber  v.  Biggerstoff,  47  Wis.  551 28 

Kniss  v.  Holbrook,  16  Tnd.  App.  229 257 

Knox  v.  Eden  Musee  American  Co.,  148  N.  Y.  454 103 

Knoxville  Nat.  Bank  v.  Clark,  51  Iowa,  264 40 

Koekning  v.  Mueniminghoff ,  61  Mo.  403 29 

Kohn  v.  Consolidated  Butter  and  Egg  Co.,  30  Misc.   (N.  Y.) 

725 ^27 

Konig  v.  Bayard,  1  Pet.  250 240 

Korkemas  v.  Macsoud,  131  App.  Div.  728 194,  195 

Kraemer  v.  Schnitzer,  109  N.  E.  Rep.  695 38,  40 

Kunkel  v.  Spooner,  9  Md.  462 94 

Kushner  v.  Abbott,  156  Iowa,  598 109 

Ladd  v.  Franklin,  37  Conn.  64 103 

Lake  Shore  National  Bank  v.  Butler  Colliery  Co.,  51  Hun,  63. .  174 

Lambert  v.  Pack,  1  Salk.  127 131 

Land,  etc.,  Co.  v.  Northwestern  Nat.  Bank,  196  Pa.  St.  230. .. .  57 

Landis  v.  White,  127  Tenn.  504 90 

Lane  v.  Hydes,  163  Mo.  App.  688 , 200 

v.  Stacy,  8  Allen,  41 136 

Lankofsky  v.  Raymond,  217  Mass.  98 147 

Lassas  v.  McCarty,  47  Ore.  474 59,  112 

Laubach  v.  Pursell,  35  N.  J.  Law,  434 203 

Lawrence  v.  Miller,  16  N.  Y.  235 168,  185 

Lawson  v.  First  National  Bank,  102  S.  W.  Rep.  324 109 

Lazier  v.  Horan,  55  Iowa,  77 140 

Leask  v.  Dew,  102  App.  Div.  529 204 

Leather  Manufacturers'  Nat.  Bank  v.  Morgan,  117  U.  S.  96. .  58 

Leavitt  v.  Putnam,  1  Sandf.  199 29 

3  N.   Y.   494 79 

Leavitt  v.  Thurston,  38  Utah,  351 81,  107,  116 

Legg   v.   Vinal,  165   Mass.   555 192,234 

Lehigh  Valley  Coal  v.  West  Depere  Agr.  Works,  63  Wis.  45. .  70 

Leidy  v.  Tammany,  9  Watts,  353 143 

Lenheim  v.  Wilmarding,  55  Pa.  St.  73 68 

Lenox  v.  Roberts,  2  Wheat,  373 176 

Leonard  v.  Draper,  187  Mass.  536 127,  131 

Lehrenkrauss  v.  Bonnell,  199  N.  Y.  240 62 

Levy  v.  Arons,  81  Misc.  165 207 

v.  Bank  of  U.  S.,  4  Dallas,  234 120 

v.  Ford,  41  La.  Ann.  873 61 

Lewis  v.  Brehme,  33  Md.  412 184 

Lewisohn  v.  The  Kent  and  Stanley  Co.,  87  Hun,  257 33 

Lewiston  Trust  Co.  v.  Shackford,  213  Mass.  432 116 


TABLE   OF   CASES. 


PAGE 

Lewy  v.  Wilkenson,  135  La.  105 123,  160 

Liberty  Trust  Co.  v.  Tilton,  217  Mass.  462 42,    96 

Libby  v.  Mekelborg,  28  Minn.  38 29 

Lichtner  v.  Roach,  95  Atl.  Rep.  62 5,  123 

Life  Insurance  Company  v.  Pendleton,  112  U.  S.  696.  .153, 190,  214 

Light  v.  Kingsbury,  50  Mo.  331 29 

Lill  v.  Gleason,  92  Kans.  254 203 

Lindeman's  Exr.  v.  Guildin,  34  Pa.  St.  54 175 

Lindsay  v.  Price,  33  Tex.  280 77 

Lindsey  v.  McClelland,  18  Wis.  481 28,  145 

Lines  v.  Smith,  4  Fla.  47 38 

Linick  v.  Nutting,  140  App.  Div.  265 43,  108 

Linn  v.  Horton,  17  Wis.  150 169,  181 

Littauer  v.  Goldman,  72  N.  Y.  506 128,  129 

Lloyd  v.  Oliver,  18  Q.  B.  471 49 

v.  Osborne,  92  Wis.  93 249 

v.  Sigourney,  5  Bing.  252;  3  M.  P.  229 79 

Lockwood  v.  Crawford,  18   Conn.  361 140,  149,  185,  199 

Logan  v.  Ogden,  101  Tenn.  392 125 

Loizeaux  v.  Frender,  123  Wis.  193 163 

Lomax  v.  Picot,  2  Rand.  260 82 

Lombard  v.  Byrne,  194  Mass.  236 60 

Long  v.  Rhawn,  75  Pa.  St.  128 114 

v.  Shafer,  185  Mo.  App.  641 96 

Longmont  Nat.  Bank  v.  Lonkenon,  53  Colo.  489 22 

Lookout  Bank  v.  Aull,  93  Tenn.  645 85 

Lord  v.  Ocean  Bank,  20  Pa.  St.  384 68,  118 

Losee  v.  Bissell,  76  Pa.  St.  459,  462 95 

v.  Durkin,  7  J.  R.  70 106 

Loux  v.  Fox,  171  Pa.  St.  68 249 

Low  v.  Howard,  10  Cush.  159 184,  185 

11  Cush.  268 185 

Lowell  v.  Bickford,  201  Mass.  543 64,    94 

v.  Steward,  25  N.  Y.  239 19 

Trust  Co.  v.  Pratt,  183  Mass.  379 183 

Luekenbach  v.  McDonald,  184  Fed.  Rep.  184,  164  Fed.  Rep. 

296,  95  C.  C.  A.  604 154,  191 

Lust  Co.  v.  Markel,  179  Fed.  Rep.  764 64 

Lynchburg  Milling  Co.  v.  Nat.  Exch.  Bank,  109  Va.  639 60 

Lyon  v.  Ewings,  17  Wis.  61 32 

v.  Phillips,  106  Pa.  St.  57 58 

Lyons  v.  Union  Exch.  Nat.  Bank,  150  App.  Div.  493 252,  253 

MacDonald  v.  Whitfield,  L.  R.  8  App.  Cas.  733 135 


TABLE   OF   CASES.  ll 

PAGE 

Mackay  v.  St.  Mary "s  Church,  15  R.  I.  121 27 

Mackintosh  v.  Gibbs,  81  N.  J.  L.  37 ' 8 

Macleod  v.  Luce,  2  Stra.  762 17 

Madden  v.  Gaston,  137  App.  Div.  294 38 

Madison  Sq.  Bank  v.  Pierce,  137  N.  Y.  444 82 

Magee  v.  Lovell,  L.  R.  9  C.  P.  107 48 

Maginn  v.  Dollar  Savings  Bank,  131  Pa.  St.  362 254 

Magoon  v.  Reber,  76  Wis.  392 106 

Maitland  v.  Citizens'  National  Bank,  40  Md.  540 61 

Mandeville  v.  Welsh,  5  Wheat.  286 213 

Mankey  v.  Hoyt,  27  S.  D.  561 214 

Manufacturers ',  etc.,  Bank  v.  Love,  13  App.  Div.  561 51 

Manufacturers  Commercial  Co.  v.  Blitz,  131  App.  Div.  17 35 

Mannussier  v.  Wright,  158  111.  App.  219 39 

Marine  National  Bank  v.  National  City  Bank,  59  N.  Y.  67 120 

Market  and  Fulton  National  Bank  v.  Sargent,  85  Me.  349 115 

Markey  v.  Casey,  108  Mich.  184 14,    81 

Marks  v.  Boone,  24  Fla.  177 167,  177 

v.  Munson,  149  Pac.  Rep.  440 76 

Marling  v.  Fitzgerald,  138  Wis.  93 114* 

v.  Jones,  138  Wis.  2 67,  71,    72 

v.  Nommensen,  127  Wis.  363 94,  163 

Marsh  v.  Marshall,  53  Pa.  St.  396 96 

Marshall  v.  Burnby,  25  Fla.  619 224 

v.  Sonneman,  216  Pa.  St.  65 170 

Martz  v.  State  Nat.  Bank,  147  App.  Div.  250 84,    90 

Martin  v.  Bank,  94  Tenn.  176 61 

L.  Hall  Co.  v.  Todd,  139  N.  Y.  Supp.  Ill 63 

v.  Ingersoll,  8  Pick.  1 189 

v.  Stone,  67  N.  H.  367 21 

Maryland  Fertilizing  Co.  v.  Newman,  60  Md.  584 15 

Mason  v.  Frick,  105  Pa.  St.  162 27 

v.  Kilcourse,  71  N.  J.  Law,  472 233 

v.  Noonan,  7  Wis.  609 87 

Maspero  v.  Pedesclaux,  22  La.  Ann.  227 175 

Massachusetts  Bank  v.  Oliver,  10  Cush.  557 174 

National  Bank  v.  Snow,  187  Mass.  159.34,  45,  107 

209 

Matlock  v.  Scheuerman,  51  Ore.  49 100,  105,  110 

Matteson  v.  Moulton,  79  N.  Y.  627 222 

Mattison  v.  Marks,  31  Mich.  421 20 

Maule  v.  Crawford,  14  Hun,  193 30 

Maurice  v.  Fowler,  78  Misc.  357 62,    63 


Hi  TABLE   OF   CASES. 

PAGE 

Maxwell  v.  Agnew,  21  Fla.  154 246 

Mayer  v.  Jadis,  1  M.  &  Rob.  247 89 

Mayers  v.  McKimmon,  140  N.  C.  640 76,    90 

McAdam  v.  Grand  Forks  Mer.  Co.,  24  N.  D.  645 100 

MeBride  v.  Farmers'  Bank,  26  N.  Y.  450 61 

v.  111.  Nat.  Bank,  138  App.  Div.  346 192 

McCarty  v.  Roots,  21  How.  (U.  S.)  432 134 

McCarthy  v.  Kapreta,  24  N.  D.  395 5 

McCaughey  v.  Smith,  27  N.  Y.  39 220 

McClanathan  v.  Davis,  149  111.  App.  654 21 

McConeghy  v.  Kirk,  68  Pa.  St.  200 131 

MeCormiek  v.  Shea,   50    Misc.    592 205 

v.  Swem,  36  Utah,  6 16 

McDaniel  v.  Pressler,  3  Wash.  636 80 

McDonald  v.  Luckenbach,  170  Fed.  Rep.  434 122,  123 

v.  Magruder,  3  Peters,  470 134 

McFarland  v.  Sikes,  54  Conn.  250 45 

McKim  v.  King,  58  Md.  502 96,  100 

McKnight  v.  Parsons,  136  Iowa  390 97,  115,  116 

McLaughlin  v.  Doops,  84  Wash.  442 106 

McLeod  v.  Hunter,  29  Misc.  558 29,    59 

McMurray  v.  McMurray,  258  Mo.  405 115 

McNamara  v.  Jose,  28  Wash.  461 104,  112 

McPherrin  v.  Little,  36  Okla.  510 97 

MeSherry  v.  Brooks,  46  Md.  103 88 

McWherter  v.  Jackson,  10  Humph.  208 53 

Mead  v.  Engs,  5  Cow.  303 181 

Mechanics'  Amer.  Nat.  Bank  v.  Coleman,  204  Fed.  Rep.  24. .     16 

Bank  v.  Charddavoyne,  69  N.  J.  L.  256 98 

v.  Griswold,  7  Wend.  165 156 

v.  Merchants'  Bank,  6  Mete.  13 150 

v.  Stratton,  2  Keyes,  365 34 

and  Traders'  Bank  v.  Seitz,  150  Pa.  St.  632 161 

Megowan  v.  Peterson,  173  N.  Y.  1 53 

Mehlenger  v.  Harriman,  185  Mass.  245 62,    99 

Melton  v.  Brown,  25  Fla.  461 125 

v.  Pensecola  Bank  &  Tr.  Co.,  190  Fed.  Rep.  126;  111 

C.  C.  A.  166,  210 64 

Mercantile  Bank  v.  Busby,  120  Tenn.  652 123,  126 

Nat.  Bank  v.  Silverman,  148  App.  Div.  1 56 

Mercer  County  v.  Hackett,  1  Wall.  83 27 

v.  Lancaster,  5  Pa.  St.  160 182 

Merchants'  Bank  v.  Birch,  17  Johns.   24 174,  175 


TABLE   OF   CASES.  liil 


PACE 

Merchants'  Bank  v.  Griswold,  72  N.  Y.  472 219,  220 

v.  Santa  Maria,  162  App.  Div.  248 18,  97,     98 

of  Canada  v.  Brown,  86  App.  Div.  599 175 

Nat.  Bank  v.  Haverhill  Iron  Works,  159  Mass.  158  115 

Nat.  Bank  v.  Vranson,  165  N.  C.  344 107 

Meredith  v.  Dibrell,  127  Tenn.  287 200 

v.  Gallaudet,  120  N.  Y.  298 129,  137 

Merritt  v.  Jackson,  181  Mass.  67 142 

v.  Todd,  23  N.  Y.  28 141 

M.  S.  Banke  v.  Pierce,  137  N.  Y.  444 194 

Mersick  v.  Alderman,  77  Conn.  634 65 

Merz  v.  Kaiser,  20  La.  Ann.  379 89 

Messmore  v.  Morrison,  172  Pa.  St.  300 29 

Metzger  v.  Sigall,  82  Wash.  80 80 

Meuer  v.  Phenix  National  Bank,  42  Misc.  341 90,     91 

94  App.  Div.  331 252 

Meyer  v.  Beardsley,  29  N.  J.  Law,  236 216 

v.  Richards,  163  U.  S.  385 128,  129 

Meyers  v.  Standart,  11  Ohio  St.  29 223 

M.  Groh's  Sons  Co.  v.  Schneider,  34  Misc.  195 116 

Middleborough  National  Bank  v.  Cole,  191  Mass.  168 69 

Middleton  v.  Griffith,  57  N.  J.  Law,  442 74 

Milled  v.  Morton,  114  Va.   610 97 

Miller  v.  Dell  Rio  Mining  Co.,  25  Idaho,  83 203 

v.  Gilleland,  19  Pa.  St.  119 210 

v.  Hannibal  &  St.  Jo.  R.  R.  Co.,  90  N.  Y.  430 48 

v.  Kyle,  85  Ohio  St.  186 16 

v.  Kreiter,  76  Pa.  St.  78 194 

v.  Marks,  148  Pac.  Rep.  412 99 

v.  Norton,  114  Va.  610 62 

v.  Reynolds,  92  Hun,  400 53 

v.  Thompson,  4  M.  &  G.  260 212 

Mills  v.  Bank  of  U.  S.  11  Wheat.  431 171,  172 

Mingus  v.  Condit,  23  N.  J.  Eq.  313 61 

Minir  v.  Crawford,  L.  R.  2  Scotch  Appeals,  456 200 

Minturn  v.  Fisher,  4  Cal.  36 248 

Mitchell  v.  Baldwin,  88  App.  Div.  265 115 

v.  Culver,  7  Cow.  336 36 

v.  Fuller,  15  Pa.  St.  268 83 

Moggridge  v.  Jones,  14  East.  485 67 

Mohlman  Co.  v.  McKane,  60  App.  Div.  546 189 

Monson  v.  Drakely,  40  Conn.  559 50 


liv  TABLE   OF   CASES. 


PAGE 

Montgomery  v.  Crossthwait,  90  Ala.  553 15 

v.  Schwald,  177  Mo.  App.  75 195 

County  Bank  v.  Marsh,  7  N.  Y.  481 183 

Montrose  Savings  Bank  v.  Claussen,  137  Iowa,  73 98 

Monument  Nat.  Bank  v.  Globe  Works,  101  Mass.  57 69 

Moore  v.  Alexander,  63  App.  Div.  100 185 

v.  Baird,  30  Pa.  136 112 

v.  Hardcastle,  11  Md.  486 182 

Moorhead  v.  Gilmore,  77  Pa.  St.  118 103 

Moreland's  Assignee  v.  Citizens'  Savings  Bank,  97  Ky.  211..  235 
Morford  v.  The  Farmers'  Bank  of  Saratoga  County,  26  Barb. 

568 69 

Morgan  v.  Edwards,  53  Wis.  599 15 

v.  Thompson,  72  N.  J.  Law,  244 135 

Morris  v.  Cude,  57  Tex.  337 89 

Canal,  etc.,  Co.  v.  Fisher,  9  N.  J.  Eq.  699 27 

County  Brick  Co.  v.  Austin,  79  N.  J.  L.  273 62,     68 

Morrison  v.  Bailey,  5  Ohio  St.  13 248 

Lumber  Co.  v.  Lookout  Mt.  Hotel  Co.,  92  Tenn.  6 135 

Moritz  Estate,  In  Re,  239  Pa.  St.  375 200 

Morse  v.  Huntington,  40  Vt.  488 200 

Morton  v.  Naylor,   1    Hill    583 19 

v.  N.  A.  &  Selma  Ry.  Co.,  79  Ala.  590 103 

Moskowitz  v.  Deutsch,  46  Misc.  603 207,  209,  250 

Mott  v.  Havana  National  Bank,  22  Hun,  354 18 

Mountenegro-Riekm  Co.  v.  111.  Trust  Co.,  164  Ky.  608 103 

Moyer  &  Brother's  Appeal,  87  Pa.  129 156 

Mudd  v.  Harper,  1  Md.  110 29 

Muir  v.  Edelen,  156  Ky.  212 116 

Muller  v.  Kling,  149  App.  Div.  176,  181 219,  220 

Munger  v.  Shannon,  61  N.  Y.  251 17,  19,  213 

Munn  v.  Burch,  25  111.  35 254 

Munroe  v.  Stanley,  220  Mass.  438 207 

Murchison  Nat.  Bank  v.  Dunn  Oil  Mills,  150  N.  C.  718.. 62,    79 

Murray  v.  Judah,  6  Cow.  484 247 

v.  Lardner,  2  Wall.  110 103,  115 

Murphy  v.  Estate  of  Skinner,  160  Wis.  554 60,    76 

v.  Panter,  62   Ore.   522 119 

Musson  v.  Lake,  4  How.  262 149 

Muth  v.  Dolfield,  43  Md.  466 : 27 

Myers  v.  Chesley,  177  S.  W.  Rep.  326 55 

Myrick  v.  Merritt,  22  Fla.  335 224 

Nailor  v.  Bowie,  3  Md.  251 148 


TABLE   OF   CASES.  lv 


PAGE 

Nash  v.  De  Freville  (1900),  2  Q.  B.  72 195 

National  Bank  v.  Nat.  Bank  of  Commonwealth,  139  Mass.  513  251 

v.  Cade,    73    Mich.    449 182 

v.  Shaw,  79  Me.  376 180 

v.  Sutton  Manufacturing  Co.,  6  U.  S.  App.  312     15 
of  America  v.  National  Bank  of  Illinois,  164 

111.  503 254 

of  Aurora  v.  Basuier,  65  Fed.  Rep.  58 14 

of  Commerce  v.  Armbruster,  42  Okla.  656 ....     98 
v.  Atkinson,  55  Fed.  Rep.  465,  27 

U.  S.  App.  88 69 

of  Commerce  v.  Farmers'  &  Merchants'  Bank, 

87  Neb.  843 74 

of  Commerce  v.  Pick,  13  N.  D.  74 Ill 

v.  Morris,  156  Mo.  App.  51 64 

Newberg  v.  Wentworth,  218  Mass.  30 18 

of  Newport  v.  Snyder  Manufacturing  Co.,  117 

App.  Div.  370 69,    70 

of  North  America  v.  Bangs,  106  Mass.  441 121 

of  Phoenixville  v.  Buckwalter,  214  Pa.  St.  289.  118 

of  Republic  v.  Young,  41  N.  J.  Eq.  531 103 

of  Rolla  v.  First  Nat.  Bank  of  Salem,  141  Mo. 

App.  719 120 

of  Washington  v.  Texas,  20  Wall.  72 88 

Butchers'  and  Drovers'  Bank  v.  Hubbell,  117  N.  Y. 

384 79 

Citizens'  Bank  v.  Toplitz,  81  App.  Div.  593,  178  N. 

Y.  466  200 

Exchange  Bank  v.  Cumberland  Lumber  Co.,  100  Tenn. 

479 125 

Exchange  Bank  v.  Hartford  P.  &  E.  R.  Co.,  8  R.  I. 

375 12,    27 

Exchange  Bank  v.  Lester,  194  N.  Y.  461 40,  208 

Exchange  Bank  v.  Lubrano,  68  Atl.  Rep.  944...  123,  132 

246 
National  Park  Bank  v.  German- American  M.  W.  &  S.  Co.,  116 

N.  Y.  281 70,  105 

v.  Kelling  Karel  Co.,  189  111.  App.  375.     99 

v.  Koehler,  204  N.  Y.  174 198 

v.  Ninth  National  Bank,  46  N.  Y.  77. . . .  120 
v.  Seaboard  National  Bank,  114  N.  Y.  28.  130 

v.  Sitta,  127  App.  Div.  624 63,  226 

National  Revere  Bank  v.  Morse,  163  Mass.  381 61,  102,  115 


lvi  TABLE   OP   CASES. 

PAGE 

National  Savings  Bank  v.  Cable,  73  Conn.  568 19 

Ulster  County  Bank  v.  Madden,  114  N.  Y.  280 209 

Union  Bank  v.  Todd,  132  Pa.  St.  312 62 

Neal  v.  Wilson,  213  Mass.  336 71 

Nelson  v.  Cowing,  6  Hill,  333 9(5 

v.  First  National  Bank,  69  Fed.  Rep.  798 234 

29  U.  S.  App.  554 172 

v.  Nelson  Bennett  Co.,  31  Wash.  116 217 

New  v.  Walker,  108  Ind.  365 257 

Newcombe  v.  Fox,  1  App.  Div.  389 46,    93 

New  Haven  Mfg.  Co.  v.  New  Haven  Pulp  and  Board  Co.,  76 

Conn.  126 89 

Newell  v.  Gregg,  51  Barb.  253 97 

Newhall  v.  Clark,  3  Cush.  376 224 

Newman  v.  King,  54  Ohio  St.  273 209 

v.  Newman,  160  App.  Div.  331 71 

New  York  &  N.  H.  R,  R.  Co.  v.  Schuyler,  34  N.  Y.  30 220 

N.  Y.  Produce  Exch.  Bank  v.  Twelfth  Ward  Bank,  135  A.  D.  52.  132 
Nevins  v.   Moore,   221   Mo.   331 184 

v.  Townsend,   6   Conn.   7 100 

Niagara  Bank  v.  Fairman  Co.,  31  Barb.  403 222,  223 

Niblock  v.  Sprague,  200  N.  Y.  390 45 

Nichols  v.  Ruggles,  76  Me.  27 17 

Night  &  Day  Bank  v.  Rosenbaum,  177  S.  W.  Rep.  693 200 

Nightingale  v.  Meginnis,  34  N.  J.  Law,  461 199 

Noble  v.  Beeman-Spaulding  Co.,  65  Ore.  93 72,  122,  135 

Nolan  Bros.  Lumber  Co.  v.  Dudley  Lumber  Co.,  128  Tenn.  11 . .  203 

Norman  v.  McCarthy,  56  Colo.  290 45 

Northampton  National  Bank  v.  Kidder,  106  N.  Y.  221 117 

North  Atchinson  Bank  v.  Garretson,  51  Fed.  Rep.  167 218,  220 

Northfield  National  Bank  v.  Arndt,  132  Wis.  383 98 

Northwestern  Coal  Co.  v.  Bowman,  69  Iowa,  150 7,  182,  247 

National  Bank  v.  Bank  of  Commerce,  107  Mo. 

402 79 

Norton  v.  Ellam,  2  M.  &  W.  461 139 

Norwich  Bank  v.  Hyde,  13  Conn.  281 39,    47 

O'Bannon  Co.  v.  Curran,  129  App.  Div.  90 156 

Ocean  National  Bank  v.  Fant,  50  N.  Y.  474,  476 149 

v.  Williams,  102  Mass.  141 234 

O'Connor  v.  Mechanics'  Bank,  124  N.  Y.  324 254 

Oil  Well  Supply  Co.  v.  MacMurphy,  119  Minn.  500 218 

Oeser  v.  Behrend,  89  Misc.  391 110 


TABLE   OF   CASES.  lvii 


PACE 

Ofenstein  v.  Bryan,  20  App.  Cases  D.  C.  1 206 

Ogelsby  v.  Bank  of  New  York,  114  Va.  663 16 

Oleon  v.  Rosenbloom,  247  Pa.  St.  250 25 

Olry  v.  Miller,  74  Conn.  304 143 

Oppenheimer   v.    Farmers'    and   Mechanics'    Bank,    97    Tenn. 

19 15,  112 

Oppikof er  v.  Murphy,  146  App.  Div.  581 110 

Orange  County  Trust  Co.  v.  Miller,  149  App.  Div.  292 247 

Oriental  Bank  v.  Gallo,  112  App.  Div.  360 131 

Orr  v.  South  Amboy  Terra  Cotta  Co.,  113  App.  Div.  103 105 

Osborne  v.  Hubbard,  20   Ore.   318 27 

Ostenberg  v.  Kanka,  95  Neb.  314 116 

Otis  v.  Cullum,  92  U.  S.  448 129 

Overton  v.  Tyler,  3  Pa.  St.  346 25 

Ovrick  v.  Colston,  7  Gratt.  189 38 

Owens  v.  Blackburn,  161  App.  Div.  827 12,  59,  246 

Owensboro  Savings  Bank  v.  Haynes,  143  Ky.  534 186 

Oxford  Bank  v.  Davis,  4  Cush.  188 227 

Oxnard  v.  Varnum,  111  Pa.  St.  193 148 

Packard  v.  Dunfee,  119  App.  Div.  599 132 

v.  Wendholz,  88  App.  Div.  365;  180  N.  Y.  549 131 

Page  v.  Monell,  3  Abb.  Ct.  App.  Dec.  433 ' 36 

Paige  v.  Ford,  65  Ore.  540 23,  31,  81,  107 

Paine  v.  Central  Vermont  R.  R.  Co.,  118  U.  S.  152 142 

v.  Edsell,  19  Pa.  St.  178 174,  200 

Pardee  v.  Fish,  60  N.  Y.  265. 141 

Parker  v.  City  of  Syracuse,  31  N.  Y.  376 19 

v.  Gordon,  7  East.  387 150 

v.  Kellogg,  158  Mass.  90 148 

v.  Stroud,  98  N.  Y.  379. . : 140,  141 

Parks  v.  Smith,  155  Mass.  26,  33 185 

Parr  v.  City  Trust  Co.,  95  Md.  291 156 

Parry  v.  Taylor,  148  N.  C.  362 166 

Passmore  v.  North,  13  East.  517 35 

Passut  v.  Heubner,  81  Misc.  249 31 

Patch  v.  Washburn,  82  Mass.  82 135 

Paterson  v.  Fowler,  162  App.  Div.  21 115 

Patterson  v.  Todd,  18  Pa.  St.  420 29,     88 

Pavenstedt  v.  N.  Y.  Life  Ins.  Co.,  203  N.  Y.  91 232 

Payne  v.  Zell,  98  Va.  294 64 

Payson  v.  Whitcomb,  15  Pick.  212 139 

Peach  v.  Bligh,  37  111.  317 76 

Tearce  v.  Langfit,  101  Pa.  St.  507 ISO 


lviii  TABLE   OF   CASES. 

PAGE 

Peason  v.  Garrett,  4  Mod.  242 21 

Penseeola  State  Bank  v.  Melton,  210  Fed.  Rep.  57 209 

People's  Bank  v.  Brooke,  31  Md.  7 233 

v.  Franklin  Bank,  88  Term.  299 121 

v.  Keeck,  26  Md.  521 151 

People's  Nat.  Bank  v.  Rice,  149  App.  Div.  18 119,  133 

v.  Sckepflin,  73  N.  J.  Law,  29 69 

v.  Taylor,  149  Pac.  Rep.  763 34 

v.  Miller,  152  N.  W.  Rep.  257.... 98,  101,  116 

State  Bank    v.  Rryden,  91  Kans.  216 195 

Savings  Bank  v.  Bates,  120  U.  S.  556 61 

Perez  v.  Bank  of  Key  West,  36  Fla.  467 194 

Perry  v.  Bigelow,  128  Mass.  129 24 

v.  Kruger,  45  App.  Div.  187 174 

Pettyjohn  v.  Nat.  Exch.  Bank,  101  Va.  Ill 58 

Phelan  v.  Moss,  67  Pa.  St.  59 103 

Phelps  v.  Stocking,  21  Neb.  444 177 

v.  Vischer,  50  N.  Y.  69 126 

v.  Webber,  84  N.  J.  L.  630 54 

Phillips  v.  Astberg,  2  Taunt.  206 146 

v.  Dippo,  93  Iowa,  35 186 

v.  Eldridge,  221  Mass.  103 106,  116 

v.  Preston,  5  How.   (U.  S.)   278 135 

Philpotts  Estate,  In  re,  151  N.  W.  Rep.  825 95,  142 

Pkenix  Nat.  Bank  v.  Hanlon,  183  Mo.  App.  243 198 

Phoenix  Bank  v.  Hussey,  12  Pick.  483 214,  231 

Insurance  Co.  v.  Allen,  11  Mich.  30 227 

Pickle  v.  People's  National  Bank,  88  Tenn.  380 251 

Pier  v.  Heinrichsorren,  67  Mo.  163 154,  179 

Pierce  v.  Indseth,  106  U.  S.  546 233 

v.  State  Nat.  Bank,  215  Mass.  18 251 

v.  Struthers,  27  Pa.  St.  249 148 

Pine  v.  Smith,  11  Gray,  38 97 

Piner  v.  Brittain,  165  N.  C.  401 66 

Piper  v.  Neylon,  88  Neb.  253 116 

Pitts  v.  Jones,  9  Fla.  519 190 

Pitzer  v.  McCune,  152  111.  App.  145 16 

Place  v.  Mcllvain,  38  N.  Y.  960 190 

Planters'  Bank  v.  Evans,  36  Tex.  592 189 

v.  Keese,  7  Heish,  200 247 

Piatt  v.  The  Sauk  County  Bank,  17  Wis.  222 28 

Plover  Savings  Bank  v.  Moodie,  135  Iowa,  685 144,  250 

Poole  v.  Tolleson,  1  McCord,  200 29,    88 


TABLE   OF   CASES.  lix 


PACK 

Pope  v.  Lumber  Company,  162  N.  C.  206 19 

Porter  v.  Judson,  1   Gray,  175 233 

v.  Porter,  51  Me.  376 2!) 

Potts  v.  Crudup,  150  Pac.  Rep.  170 16 

Power  v.  Mitchell,  7  Wis.  159 155,  157 

Pratt  v.  Rounds,  160  Ky.  358 103 

Prescott  Bank  v.  Coverly,  7  Gray,  216 7,  131 

National  Bank  v.  Butler,  157  Mass.  548 131 

Preston  v.  Mann,  25  Conn.  127 89 

Price  v.  Jones,  105  Ind.  544 21 

v.  Neal,  3  Burrows,  1354 120 

Pulsifer  v.  Hitckkiss,  12  Conn.  234 67 

Purcell  v.  Allemong,  22  Gratt,  739 250 

Quiggle  v.  Herman,  131  Wis.  379 Ill,  258 

Quimby  v.  Varnum,  190  Mass.  211 202 

Quincy  Mutual  Fire  Ins.  Co.  v.  Inter.  Trust  Co.,  217  Mass.  370 .     86 

Quinn  v.  Hoord,  43  Vt.  375 6] 

Railroad  Company  v.  National  Bank,  102  U.  S.  14 61 

Raleigh  County  Bank  v.  Poteet,  74  W.  Va.  511 16,  109 

Rambo  v.  First  Nat. State  Bank  of  Argentine,  88  Kans.  257. .     25 

213,  217,  253 
Rand  v.  Dovey,  83  Pa.  St.  281 89 

v.  Reynolds,  2  Gratt.  171 182 

Randolph  Nat.  Bank  v.  Hornblower,  160  Mass.  401 253 

Ranger  v.  Cory,  1  Mete.  369 100 

Raymond  v.  Sellick,  10  Conn.  485 29,     61 

Redlich  v.  Doll,  54  N.  Y.  238 36,    41 

Redman  v.  Adams,  51  Me.  433 17 

Reed  v.  Spear,  107  App.  Div.  144 152 

v.  Wilson,  41  N.  J.  Law,  29 150 

Regester's  Sons  Co.  v.  Reed,  185  Mass.  226 116 

Regina  Flour  Mill  Co.  v.  Holmes,  156  Mass.  11 80 

Reier  v.  Straus,  54  Md.  278 234 

Reilly  v.  Daly,  159  Pa.  St.  605 213 

Reincke  v.  Wright,  93  Wis.  368 155 

Reinhart  v.  Schall,  69  Md.  352 135,  202 

Reynolds  v.  Appleman,   41   Md.   615 233 

v.  Vint,  73   Ore.  528 3 

Rice  v.  Grange,  131  N.  Y.  149 67 

v.  Rice,  43  App.  Div.  458 21 

Rickets  v.  Pendleton,  14  Md.  320 148,  192,  234 

Richards  v.  Market  Exch.  Bank,  81  Ohio  St.  348 119 

Riddle  v.  Bank  of  Montreal,  145  App.  Div.  207 214,  247 


lx  TABLE   OF   CASES. 

PAGE 

Ridgeley  Bank  v.  Patton,  109  111.  484 247 

Riehl  v.  Austin,  155  App.  Div.  207 189,  198 

Riker  v.  Sprague  Manufacturing  Co.,  14  R.  I.  402 20 

Roach  v.  Ostler,  1  Man.  &  Ry.  120 189 

v.  Woodaal,  91  Tenn.  206 55,    61 

Roberts  v.  Hall,  37   Conn.  205 61 

v.  Hawkins,  70  Mich.  566 167 

v.  McGrath,  38  Wis.  52 -45 

v.  Parish,  17  Oregon,  583 32 

v.  Snow,  28  Neb.  425 29 

Robertson  v.  Breedlone,  7  Porter,  541 114 

v.  Kensington,  4  Taunt.  30 82 

Robins  v.  Lair,  31  Iowa,  9 61 

Robinson  v.  Ames,  20   Johns.   146 227 

v.  Barnett,  19  Fla.  670 184 

v.  Lymon,   10    Conn.    31 114 

Robson  v.  Bennett,  2  Taunt.  388 168 

Rock  County  National  Bank  v.  Hollister,  21  Minn.  385 SO 

Rockfield  v.  First  National  Bank  of  Springfield 4,  126 

Rockville  National  Bank  v.  Citizen's  Gas  Light  Co.,  72  Conn. 

576 61 

v.  Holt,  58  Conn.  526 200 

Rogers  v.  Durrant,  140  U.  S.  298 247 

v.  Sipley,  35  N.  J.  Law,  86 71 

v.  Vosburgh,  87  N.  Y.  228 209 

Rogerson  v.  Ladbroke,  1  Bing.  93 250 

Rome  v.  Young,  2  Brod.  &  Bing.  165 ;  2  Bligh.  391 224 

Rosemon  v.  Mahoney,  86  App.  Div.  377 63 

Roseville  State  Bank  v.  Heslet,  84  Kans.  315 22 

Ross  v.  Bedell,  5  Duer,  462 190 

v.  Hurd,  71  N.  Y.  14, 18 184 

Rosson  v.  Carroll,  90  Tenn.  90 233,  234 

Rouse  v.  Wooten,  140  N.  C.  557 7 

Rouvant  v.  San  Antonio  National  Bank,  63  Tex.  610 121 

Rowland  v.  Fowler,  47  Conn.  349 112 

Roy  v.  Duff,  152  N.  W.  Rep.  606 91,     94 

Ruff  v.  Webb,  1  Esp.  129 ' 212 

Rumball  v.  Ball,  10  Md.  38 139 

Russ  v.  Sadler,  197  Pa.  St.  51 134 

Russell  v.  Langstaffe,  2  Doug.  514 37 

Ryhiner  v.  Feickert,  92  111.  305 84 

Sabine  v.  Paine,  166  App.  Div.  9 110,  132,  246 

Salen  v.  Bank  of  the  State  of  New  York,  110  App.  Div  636 56 


TABLE   OF   CASES.  lxi 


PAGE 

Salmon  v.  Hopkins,  CI  Conn.  47 86 

Salt  Springs  National  Bank  v.  Burton,  58  N.  Y.  430 146,  150 

Sanderson  v.  Sanderson,  20  Fla.  292 178 

Sargent  v.  Soutkgate,  5  Pick.  312 97 

Sasscer  v.  Farmers'  Bank,  4  Md.  409 171,  179 

v.  Stone,  10  Md.  98 ]48 

Saunderson  v.  Piper,  5  Bing.  N.  C.  425 47 

Saylor  v.  Buskong,  100  Pa.  St.  27 >. .  254 

Sayre  v.  Leonard,  57  Colo.  116 45 

Schaeffer  v.  Fowler,  111  Pa.  St.  451 61 

v.  Marsh,  90  Misc.  307 45,  107 

Schierl  v.  Baumel,  75  Wis.  75 184 

Seklesinger  v.  Gilkooly,  189  N.  Y.  1 110 

v.  Kelly,  114  App.  Div.  546 110,  111 

v.  Lekmaier,  191  N.  Y.  69 110 

v.  Schultz,  110  App.  Div.  356 143 

Schmidt  v.  Bank  of  Commerce,  234  U.  S.  64 5,  102 

v.  Pegg,  172  Michigan,  160 80,     81 

Schulthers  v.  Sellers,  223  Pa.  St.  506 116 

Schmittler  v.  Simon,  101  N.  Y.  554 16,  86,  132 

Schreyer  v.  Hawkes,  22  Ohio  St.  308 39,    47 

Schroeder  v.  Turner,  68  Md.  506 125 

Schwartzman  v.  Post,  94  App.  Div.  474 195 

Scotland  County  Nat.  Bank  v.  Hohn,  146  Mo.  App.  699 74 

v.  O'Connel,  23  Mo.  App.  165..     40 

Scott  v.  Pilkington,  15  Abb.  Pr.  280 220 

Scudder  v.  Union  National  Bank,  91  U.  S.  406 217,  219 

Seaboard  Nat.  Bank  v.  Bank  of  Amer.  193  N.  Y.  26 33,    56 

Seager  v.  Drayton,  218  Mass.  571 66 

Seaman  v.  Muir,  144  Pac.  Rep.  121 74 

Seaton  v.  Scoville,  18  Kans,  433 15,  181 

Seattle  Shoe  Co.  v.  Packard,  43  Wash.  527 51 

Second  Nat.  Bank  v.  Anglin,  6  Wash.  403 15 

v.  Graham,  246  Pa.  St.  256 197 

v.  Hoffman,  229  Pa.  St.  429 116 

v.  Morgan,  165  Pa.  St.  199 103 

v.  Smith,  118  Wis.  18 171 

Sedgwick  v.  McKim,  53  N.  Y.  307 41 

Seldner  v.  Mount  Jackson  National  Bank,  Q6  Md.  488...  156,  175 

Self  v.  King,  28  Tex.  552 29 

Seltzer  v.  Deal,  135  N.  C.  428 103,  105 

Serle  v.  Norton,  9  M.  &  W.  309 36 

Shattuck  v.  Guardian  Trust  Co.,  204  N.  Y.  200 255 


lxii  TABLE   OP   CASES. 

PAGE 

Shaw  v.  Camp,  160  111.  425 21 

v.  Knox,  98  Mass.  214 134 

v.  Pratt,  22  Pick.  305 105 

Shawmut  National  Bank  v.  Manson,  168  Mass.  425 61,     97 

Shea  v.  Vahey,  215  Mass.  80 136,  167,  181 

Shedd  v.  Brett,  1  Pick.  401 146,  171,  179 

Shelburne  Falls  National  Bank  v.  Townsley,  102  Mass.  177..  181 

107  Mass.  444..  182 

Sheldon  v.  Benharn,  4  Hill,  129 173 

v.  Heaton,  88  Hun,  535 29 

Shenandoah  National  Bank  v.  Marsh,  89  Iowa,  273 15 

Shepard  v.  Chamberlain,  8  Bray,  225 150 

v.  Hauson,  9  N.  D.  249 94 

v.  Hawley,  1  Conn.  367 175 

Sherer  v.  Easton  Bank,  33  Pa.  St.  134 175,  233 

Sherman  v.  Ecker,  59  Misc.  216 192 

v.  Goodwin  (Ariz.),  89  Pac.  Rep.  517 246 

Shipman  v.  Bank  of  the  State  of  New  York,  126  N.  Y.  318 32 

Shires  v.  Commonwealth,  120  Pa.  St.  368 257 

Shoemaker  v.  Mechanics'  Bank,  59  Pa.  St.  79 180 

Shoenberger's  Executor  v.  Lancaster  Savings  Institution,  28 

Pa.  St.  459 174 

Shover  v.  Western  Union  Telegraph  Co.,  57  N.  Y.  459 219 

Shutts  v.  Fingar,  100  N.  Y.  539 141,  197 

Sice  v.  Cunningham,  1  Cowen,  397 100 

Siebeneck  v.  Anchor  Savings  Bank,  111  Pa.  St.  187 199,  200 

Siegel  v.  Dubinsky,  50  Misc.  681 177,  187 

Sieger  v.  Second  National  Bank,  132  Pa.  St.  307 191 

Simpson  v.  Davis,  119  Mass.  269 206 

Simus  v.  Larkin,  19  Wis.  390 183 

Singer  Manufacturing  Co.  v.  Summers,  143  N.  C.  102 100,  116 

144,  248,  250 

Skilbeck  v.  Garbett,  7  Q.  B.  846 180 

Slack  v.  Kirk,  67  Pa.  St.  380 135 

Slagel  v.  Rusts'  Admr.,  4  Gratt.  274 135 

Sloan  v.  The  Union  Banking  Co.,  67  Pa.  St.  470 106 

Slocum  v.  Lizzardi,  21  La.  Ann.  355 175 

Smalley  v.  Wright,  40  N.  J.  Law,  471 175 

Smathers  v.  Foxaway  Hotel  Co.,  162  N.  C.  346 64,  117,  346 

Smith  v.  Bayer,  46  Ore.  143 80,    94 

v.  Caro,  9  Oregon,  278 29,  87,  133 

v.  Clarke,  Peake,  225 83 

v.  Dunham,  8  Pick.  246 211 


TABLE   OF   CASES.  lxiii 

PAGE 

Smithv.  Ellis,  29  Me.  422 20 

v.  Erwin,  77  N.  Y.  4G6 199 

v.  Fisher,  24  Pa.  St.  222 155 

v.  Hill,  6  Wis.  154 173 

v.  James,  20  Wend.  192 249 

v.  Kendall,  6  T.  R,  123 30 

v.  Lounsdale,  6  Oregon,  78 184,  185 

v.  Maddox  Rueker  Banking  Co.,  135  Ga.  151 36 

v.  Marsack,  6  C.  B.  486 122 

v.  Melton,  133  Mass.  369 228 

v.  Nelson,  212  Fed.  Rep.  56 5,    90 

v.  Pickham,  8  Tex.  Civ.  App.  326 186 

v.  Poillon,  87  N.  Y.  590 178 

v.  Rockwell,  2  Hill,  482 149 

v.  Shippey,  182  Pa.  St.  24 77 

v.  Smith,  1  R.  I.  388 47 

v.  State  Bank,  104  N.  Y.  Supp.  750 71,  207 

v.  Whiting,  9  Mass.  334 104 

Sneel  v.  Prescott,  1  Atk.  245 79 

Snyder  v.  Corn  Exch.  Nat.  Bank,  221  Pa.  599 33 

Solomon  v.  Hopkins,  61  Conn.  47 50 

Southern  Loan  Co.  v.  Morris,  2  Pa.  St.  175 131 

Southwest  Nat.  Bank  v.  Baker,  23  Idaho,  428 106 

Spann  v.  Baltzell,  1  Fla.  301 233,  170 

Spear  v.  Pratt,  2  Hill,  582 217 

Spencer  v.  Carstarphen,  15  Colo.  445 74 

v.  Drake,  84  App.  Div.  272 143 

v.  Sloan,  108  Ind.  183 61 

Spies  v.  National  City  Bank,  174  N.  Y.  222 195 

Spoffard  v.  Norton,  126  Mass.  333 80 

Sprague  v.  Fletcher,  8  Oregon,  367 187 

Spurgeon  v.  Smiths,  114  Ind.  453 197 

St.  Charles  Savings  Bank  v.  Edwards,  243  Mo.  553 96 

St.  Lawrence  Nat.  Bank  v.  Watkins,  153  App.  Div.  551. .  .254,  247 

St.  L.  &  S.  F.  Ry.  Co.  v.  Johnston,  133  U.  S.  566 254 

St.  Paul's  Church  v.  Fields,  81  Conn.  670 28 

Stansbury  v.  Emberg,  128  Tenn.  104 162 

Standard  Trust  Co.  v.  Commercial  Nat.  Bank,  167  N.  C.  260..   116 

Stanton  v.  Blossom,  14  Mass.  116 168 

Stapleton  v.  Louisville  Banking  Co.,  95  Ga.  802 15 

Stark  v.  Olsen,  44  Neb.  646 15 

State  Bank  of  La  Crosse  v.  Michel,  152  Wis.  88 201 

of  Beaver  Co.  v.  Bradstreet,  89  Neb.  186 224 


lxiv  '       TABLE    Or1    CASES. 

PACE 

State  Bank  v.  Cumberland,  168  N.  C.  608 121 

of  Halstead  v.  Bilstad,  162  Iowa,  433 4 

of  New  York  Nat.  Bank  v.  Kennedy,  145  App.  Div.  GG9.  149 

Staylor  v.  Ball,  24  Md.  183 188 

Steadman  v.  Jilman,  10  Conn.  56 114 

Steckel  v.  Steckel,  28  Pa.  St.  233 99 

Stein  v.  Empire  Trust  Co.,  148  App.  Div.  850 56 

v.  Yglesias,  1  Crom.  Mees.  &  Ros.  565 114 

Steinkilper  v.  Basnight,  153  N.  C.  293 9 

Stephens  v.  Monongahela  National  Bank,  88  Pa.  St.  157 62,    68 

Stephenson  v.  Dickson,  24  Pa.  St.  148 178,  192 

Sterry  v.  Robinson,  1  Day,  11  (Conn.) 230 

Stevens  v.  Brice,  21  Pick.  193 100 

Stewart  v.  Eden,  2  Cai.  121 197 

v.  Kennett,  2  Camp.  177 168 

v.  Preston,  1  Fla.  10 81 

Stitzel  v.  Miller,  157  111.  App.  390 22 

Stoddard  v.  Kimball,  6  Cushing,  469 65 

Stone  v.  Sargent,  220  Mass.  445 39,  207 

Storrffer  v.  Curtis,  198  Mass.  560 45 

Stotts  v.  Fairfield,  163  Iowa,  726 116 

Strickland  v.  Henry,  66  App.  Div.  23 110 

Struthers  v.  Blake,  30  Pa.  St.  139 148,  181 

Stuber  v.  Schack,  83  111.  192 i 199 

Sturges  v.  Chicago  Fourth  National  Bank,  75  111.  595 214 

Sublette  v.  Brewington,  139  Mo.  App.  410 90 

Sullivan  v.  German  National  Bank,  18  Colo.  App.  99 Ill 

v.  Knauth,  161  App.  Div.  148 58 

v.  Langley,  120  Mass.  437 115 

Sulsbacker  v.  Bank  of  Charlestown,  86  Tenn.  201 147,  229 

Summers  v.  Barrett,  65  Iowa,  292 158 

Summer  v.  Bowen,  2  Wis.  524 234 

v.  Kimball,  2  Wis.  524 192 

Sumwalt  v.  Rigeley,  20  Md.  107 53 

Sussex  Bank  v.  Baldwin,  2  Harr.  487  (N.  J.) 146,  171 

Sutherland  v.  Mead,  80  App.  Div.  103 6.'] 

Suydam  v.  Combs,  3  Green  (N.  J.)  133 122 

Swan  v.  Carawan,  168  N.  C.  472 191 

Swanby  v.  Northern  State  Bank,  150  Wis.  572 85 

Sweeney  v.  Thickstum,  77  Pa.  St.  131 25 

Sweeny  v.  Easter,  1  Wall.  173 79 

Swengle  v.  Wells,  7  Ore.  222 164 

Sweringen  v.  Sewickley  Dairy  Co.,  198  Pa.  St.  68 140 


TABLE   OF   CASES.  lxV 


PAGE 

Swift  v.  Smith,  102  U.  S.  442 103 

v.  Tyson,  16  Pet.  1 61 

Sylvester  v.  Crohan,  138  N.  Y.  494 140 

Bleckley  Co.  v.  Alewine,  48  S.  C.  308 15 

Talcott  v.  Cogswell,  3  Day,  512 134 

Tanner  v.  Hall,  1  Pa.  St.  417 71 

Tapee  v.  Varley,  184  Mo.  App.  470 99 

Tate  v.  Hilbert,  2  Ves.  Jun.  112 250 

v.  Sullivan,  30  Md.  464 188,  192 

Tatum  v.  Commercial  Bank,  185  Ala.  249 66,    98 

Taunton  Bank  v.  Richardson,  5  Pick.  436 157 

Taylor  v.  Croker,  4  Esp.  187 121 

Terbell  v.  Jones,  15  Wis.  253 233 

Terry  v.  Bissell,  26  Conn.  41 37,     58 

Third  National  Bank  v.  Bowman,  50  App.  Div.  66 18 

Thompson  v.  Commercial  Bank,  3  Caldio,  49 150,  214 

v.  Farmers  State  Bank,  140  N.  W.  Rep.  877 149 

v.  Ketcham,  8  Johns.  146 29 

Thornton  v.  Appleton,  29  Me.  298 211 

v.  Wynn,  12  Wheat.  183 184 

Thorp  v.  Mindeman,  123  Wis.  149 4,  21,  76,    82 

Thorpe  v.  White,  188  Mass.  333 207 

Throop  Grain  Cleaner  Co.  v.  Smith,  110  N.  Y.  83 213,  254 

Thurston  v.  McKenn,  6  Mass.  428 100 

Tibby  Bros.  Glass  Co.  v.  Farmers'  &  Manufacturers'  Bank  of 

Sharpsburg,  220  Pa.  1 253 

Tibby  Bros.  Glass  Co.  v.  Farmers'  and  Mechanics'  Bank,    220 

Pa.    St.   1 254 

Tidmarsh  v.  Grover,  1  Maule  &  S.  735 210 

Timble  v.  Garfield  Nat.  Bank,  121  App.  Div.  870 208 

Times  Sq.  Auto  Co.  v.  Rutherford  Nat.  Bank,  47  N.  J.  Law, 

649 251 

Tindale  v.  Brown,  1  Term  Rep.  167 168 

Tinsdale  Lumber  Co.  v.  Piquet,  153  App.  Div.  266 22 

Tischlo  v.  Shurman,  49  Misc.  257 103 

Title  Guarantee  &  Trust  Co.  v.  Haven,  196  N.  Y.  487 120 

Tobey  v.  Lenning,  14  Pa.  St.  483 170 

Tod  v.  Wick,  36  Ohio  St.  370 257 

Todd  v.  Neal's  Administrator,  49  Ala.  273 235 

v.  Shelburne,  8  Hun,  512 112 

Tolman  v.  American  National  Bank,  22  R.  I.  462 57 

Tombeckbe  Bank  v.  Stratton,  7  Wend.  429 197 

Tomlinson  Carriage  Co.  v.  Kinsella,  31  Conn.  273 7 


lxvi  TABLE   OF   CASES. 

PAGE 

Toole  v.  Craft,  193  Mass.  110 4,  157,  185 

Torbet  v.  Montague,  38  Colo.  325 78,  133,  150 

Torpey  v.  Tebo,  184  Mass.  307 12,  20,  246 

Torrey  v.  Frost,  40  Me.  74 190 

Tower  v.  Stanley,  220  Mass.  429 39,  207 

Town  v.  Rice,  122  Mass.  67 24 

of   Solon  v.   Williamsburgh   Savings   Bank,  114   N.   Y. 

122 206,  207 

Townsley  v.  Sumrall,  2  Pet.  170 233 

Trader  v.  Chicester,  41  Ark.  242 15 

Traders'  National  Bank  v.  Jones,  104  App.  Div.  433 168 

v.  Rogers,  167  Mass.  315 58 

Trego  v.  Cunningham  Estate,  267  111.  367,  448 96,  135 

Trickey  v.  Larne,  6  M.  &  W.  278 67 

Triphonoft  v.  Sweeney,  65  Ore.  209 35,  107 

Troy  City  Bank  v.  Lanman,  19  N.  Y.  477 223 

Trust  Co.  of  America  v.  Hamilton  Bank,  127  App.  Div.  515. . .     33 

Trustees  of  American  Bank  v.  McComb,  105  Va.  473 5 

the  I.  I.  Fund  v.  Lewis,  34  Fla.  424 163 

Tullis  v.  McClary,  128  Iowa,  493 96 

Turnbull  v.  Maddux,  68  Md.  579 184 

Turner  v.  Kimble,  37  Okla.  92 249 

Tuscumbia,  etc.,  R.  R.  Co.  v.  Rhodes,  8  Ala,  206 114 

Twelfth  Ward  Bank  v.  Brooks,  63  App.  Div.  220 202 

Twentieth  St.  Bank  v.  Jacobs,  74  W.  Va.  528 109 

Tyler  v.  Young,  30  Pa.  St.  143 143 

Tyson  v.  Joyner,  139  N.  C.  69 94 

Ulster  County  Bank  v.  McFarlan,  5  Hill,  432 219 

Union  Bank  v.  Fowlkes,  2  Sneed,  556 214 

v.  Deshel,  139  App.  Div.  217 180 

v.  Sullivan,  214  N.  Y.  332 132,  136 

v.  Willis,  8  Mete.  504 153 

National  Bank  v.  Franklin  Nat.  Bank,  249  Pa.  375.  .121,  222 

Stock  Yards  v.  Bolan,  14  Idaho,  87 22 

Trust  Co.  v.  McCrum,  145  App.  Div.  409 39,  199 

v.  McGinty,  212  Mass.  205 3 

United  States  v.  American  Exchange  National  Bank,  70  Fed. 

Rep.  232 130 

v.  Hodge,  6  How.  279  (U.  S.) 199 

v.  White,  2  Hill,  59 31 

National  Bank  v.  Ewing,  131  N.  Y.  506 71 

University  Press  v.  Williams,  48  App.  Div.  (N.  Y.)  190 188 

Valley  Savings  Bank  v.  Mercer,  97  Md.  458 103 


TABLE   OF   CASES.  lxvii 


PACE 

Vanarsdale  v.  Hax,  107  Fed.  Rep.  878 89 

Van  Buskirk  v.  State  Bank  of  Rocky  Ford,  35  Colo.  142 217 

Vanderford  v.  Farmers'  and  Mechanics'  National  Bank,  105 

Md.  164 119,  200 

Vander  Ploeg  v.  Van  Zuuk,  135  Iowa,  350 4,  41,     96 

Van  Duzer  v.  Howe,  21  N.  Y.  531 41 

Van  Hoosen  v.  Van  Alstyne,  9  Wend.  75 29,    88 

Van  Slyke  v.  Rooks,  181  Mich.  88 103,  106 

Vathir  v.  Zane,  6  Gratt.  246 115 

Vinton  v.  King,  4  Allen,  562 97 

Voris  v.  Schoonover,  91  Kans.  530 30,    99 

Vosburgh  v.  Diefendorf,  119  N.  Y.  357 103 

Voss  v.  Chamberlain,  139  Iowa,  569 64 

Wadhams  v.  Portland,  etc.,  Ry.  Co.,  37  Wash.  86 217,  218 

Wagman  v.  Hoag,  14  Barb.  233 200 

Wagner  v.  Kenner,  2  Rob.  120 36 

Wahlig  v.  The  Standard  Pump  Manufacturing  Co.,  25  N.  Y. 

St.  Rep.  864 69 

Walker  v.  Bank  of  State  of  New  York,  13  Barb.  636 223,  225 

v.  Dunham,  135  Mo.  App.  396 8,  126 

Wall  v.  Hallenbeck,  19  Neb.  639. 76 

Wallabout  Bank  v.  Peyton,  123  App.  Div.  727 98,  103 

Wallace  v.  Agry,  4  Mason,  333 227 

v.  Crilly,  46  Wis.  577 147 

v.  McConnell,  13  Peters,  136 140,  224 

Walsh  v.  Blatchley,  6  Wis.  422 224,  242,  243 

v.  Dart,  12  Wis.  635 29 

v.  Dort,  23  Wis.  334 222 

Walstenholme  v.  Smith,  34  Utah,  300 119 

Ward  v.  Allen,  2  Mete.  53 217 

v.  City  Trust  Co.,  192  N.  Y.  61 71 

v.  Tyler,  52  Pa.  St.  393 80 

Waring  v.  Betts,  90  Va.  46 146,  149,  150 

Watervliet  Bank  v.  White,  1  Denio,  608 85 

Watson  v.  Russell,  3  B.  &  S.  34;  5  B.  &  S.  968 96 

v.  Wyman,  161  Mass.  96,  99 163 

Waxberg  v.  Stappler,  83  Misc 78 

Way  v.  Butterworth,  108  Mass.  509 151 

Weaver  v.  Barden,  49  N.  Y.  286 61 

Weber  v.  Orton,  91  Mo.  680 93,  146 

Wedge  Mines  Co.  v.  Denver  National  Bank,  19  Colo.  App.  182.  248 

Weeks  v.  Esler,  143  N.  Y.  374 27 

v.  Parsons,  179  Mass.  570 135 


lxviii  TABLE   OF   CASES. 


PAGE 

Weems  v.  Farmers'  Bank,  15  Md.  231 192,  234 

Wells  v.  Duffy,  69  Wash.  310 104 

Welsh  v.  B.  C.  Taylor  Manufacturing  Co.,  82  111.  581 153 

v.  Sage,  47  N.  Y.  143 103 

West  Branch  Bank  v.  Fulner,  3  Pa.  St.  399 190 

Westberg  v.  Chicago  L.  &  C.  Co.,  117  Wis.  589 12,  222 

Western  Wheeled  Scraper  Co.  v.  Sadilek,  50  Neb.  105 249 

Westfall  v.  Farwell,  13  Wis.  504,  509 173 

Westminster  Bank  v.  Wheaton,  4  R.  I.  30 248 

West  River  Bank  v.  Taylor,  34  N.  Y.  128 168, 169,  197 

Wetlaufer  v.  Baxter,  137  Ky.  362. 1 34 

Weyerhauser  v.  Dunn,  100  N.  Y.  150 211 

Weyman  v.  Yeomans,  84  111.  403 210 

Wheeler  v.  Field,  6  Mete.  290 155 

v.  Guild,  20  Pick.  545,  553 163 

v.  Warner,  47  N.  Y.  519 141 

v.  Webster,  1  E.  D.  Smith,  1 217 

Whitcomb  v.  Nat.  Exch.  Bank,  123  Md.  612 195,  205 

White  v.  Camp,  1  Fla.  94 87 

v.  Savage,  48  Oregon,  604 71 

Whitehead  v.  Walker,  10  Mees.  &  Welsb.  696 114 

Whitford  v.  Burckmeyer,  1  Gil.  127 183 

Whiten  v.  Hayden,  9  Allen,  408 53,    80 

Whitesides  v.  Northern  Bank,  10  Bush.  501 210 

Whitney  v.  Clary,  145  Mass.  156 61 

v.  Collins,  15  R.  I.  44 141,  185 

v.  Elliot  Nat.  Bank,  137  Mass.  351 17 

v.  National  Bank  of  Potsdam,  45  N.  Y.  303 128 

Whitaker  v.  Morrison,  1  Fla.  25 184,  185 

Whittle  v.  Fond  du  Lac  National  Bank,  26  S.  W.  Rep.  1106. . .     14 

Whitwell  v.  Brigham,  19  Pick.  117 122,  176 

v.  Johnson,  17  Mass.  499 178 

Wilbour  v.  Hawkins,  94  Atl.  Rep.  856 71,     96 

Wilkie  v.  Chandon,  1  Wash.  355 187 

Wilkens  v.  Usher,  123  Ky.  696 65 

Willett  v.  Phoenix  Bank,  2  Duer.  121 34 

Williams  v.  Bank  of  United  States,  2  Peters,  96 183 

v.  Banks,  11  Md.  198 69 

v.  Drexel,  14  Md.  566 121 

v.  Holt,  170  Mass.  351 93 

v.  Huntington,  68  Md.  590 104,  112,  115 

v.  Moseley,  2  Fla.  304 28 

v.  Paintsville  Nat.  Bank,  143  Ky.  786 181,  182 

v.  Winans,  2  Gr.  239  (N.  J.) 219 


TABLE   OF   CASES.  lxix 

PAGE 

Williarnsport  Gas  Co.  v.  Pinkerton,  95  Pa.  St.  62 143 

Willis  v.  Finley,  173  Pa.  St.  28 249 

v.  Green,  5  Hill,  232 84,  153,  175 

v.  Wilson,  3  Oregon,  308 210 

Wilson  v.  Hendee,  (N.  J.)  74  N.  J.  L.  640 126,  127,  135 

v.  Lazier,  11  Gratt.  477 66,  115 

v.  Metropolitan  Elevated  Ry.  Co.,  120  N.  Y.  145 105 

v.  Peck,  6Q  Misc.  179 172,  180,  183 

v.  Powers,  130  Mass.  127 199 

v.  Senier,  14  Wis.  380 154 

v.  Tolson,  79  Ga.  137 80 

Winans  v.  Davis,  3  Harr.  276  (N.  J.) 178 

Windham  Bank  v.  Norton,  22  Conn.  213 154,  179 

Windsor  Cement  Co.  v.  Thompson,  86  Conn.  511 3,      4 

Wintermute  v.  Torrent,  83  Mich.  555 80 

Wirt  v.  Stubblefield,  7  App.  Cas.  D.  C.  283 108 

Wisconsin  Yearly  Meeting  of  Freewill  Baptists  v.  Babler,  115 

Wis.  289   22,    26 

Wise  v.  Charlton,  4  A.  &  E.  486 23 

Wisner  v.  First  National  Bank,  220  Pa.  St.  21 222,  227 

Witherow  v.  Slaybach,  158  N.  Y.  649 135 

Wittich  v.  First  Nat.  Bank  of  Pensacola,  20  Fla.  843 248 

Wolf  v.  Hostetter,  182  Pa.  St.  292 154 

Wolstenholme  v.  Smith,  34  Utah,  300 200 

Woman  v.  Frost,  52  N.  Y.  422 67 

Wood  v.  Repold,  3  Harris  &  J.  125 134 

v.  Robinson,  22  N.  Y.  567 61 

v.  Sheldon,  42  N.  J.  Law,  425 129 

v.  Shelley,  196  Mass.  114 206 

v.  Steele,  6  Wall.  80 207,  209 

v.  Wood,  16  N.  J.  Law,  428 84 

Woodman  v.  Thurston,  8  Cush.  157 186 

Woods  v.  Fainley,  153  N.  C.  497 247 

v.  Neeld,  44  Pa.  St.  86 182 

v.  North,  84  Pa.  St.  407 15 

Son  Co.  v.  Schaefer,  173  Mass.  443 75 

Woolenweber  v.  Ketterlin,  17  Pa.  St.  389 190 

Wooley  v.  Cobb,  165  Mass.  503 75 

Wortkington  v.  Cowles,  12  Mass.  30 137 

Worley  v.  Johnson,  60  Fla.  295 156 

Wright  v.  Hart's  Admr.,  44  Pa.  St.  454 28 

v.  Irwin,  33  Mich.  32 14 

v.  Vermont  Ins.  Co.,  164  Mass.  302 139 


1XX  TABLE   OF   CASES. 

PAGE 

Wyckoff  v.  Runyon,  33  N.  J.  Law,  107 67 

Yenney  v.  Central  City  Bank,  44  Neb.  402 94 

Yocum  v.  Smith,  63  111.  321 40 

Yonkers  Nat.  Bank  v.  Mitchell,  156  App.  Div.  318 246 

Young  v.  Durgin,  15  Gray,  264 183 

v.  Grote,  4  Bing.  253 40 ' 

v.  Shriner,  80  Pa.  St.  463 114 

Young's  Estate,  In  re,  234  Pa.  St.  287 129,  132 

Zimmerman  v.  Anderson,  67  Pa.  St.  421. 26 

v.  Rote,  75  Pa.  St.  188 26 

Zollner  v.  Moffitt,  222  Pa.  St.  544 173,  179,  234 


THE  NEGOTIABLE  INSTRUMENTS  LAW. 


THE  LAW  HAS  BEEN  ENACTED  IN  THE  FOLLOWING 
STATES  AND  TERRITORIES: 

Alabama.—  Laws  of  1907,  p.  660;  Code  1907,  eh.  115,  II,  p.  1060; 
Laws  of  1909,  p.  120. 

Alaska.—  Laws  of  1913,  eh.  64. 

Arizona.— Rev.  Stat.  1901,  title  49;  Laws  of  1913,  ch.  67;  Rev. 
Stat.  1913,  title  36. 

Arkansas. —  Laws  of  1913,  ch.  81. 

Colorado.— Laws  of  1897,  eh.  64;  Rev.   Stat.  1908,  eh.  XCV; 
Mills'  Anno.  Stat.  1912,  II,  p.  2213. 

Connecticut.— Laws  of  1897,  ch.  74;  Gen.  Stat.  1902,  ch.  234, 
p.  1028. 

Delaware. —  Laws  of  1911,  ch.  191. 

District  of  Columbia.— Laws  of  1899   (U.  S.  Stats,  at  Large), 
ch.  47;  Code  1901,  ch.  XLVI;  Ford's  Anno.  Code,  1910,  p.  350. 

Florida.— Laws  of  1897,  ch.  4524;   Gen.   Stat.  1906,  p.  1147; 
Comp.  Laws  1914,  II,  p.  1550. 

Hawaii.—  Laws  of  1907,  Act  89 ;  Rev.  Laws  1915,  ch.  196,  p.  1289. 

Idaho.— Laws  of  1903,  p.  380;  Rev.  Codes,  1908,  I,  p.  1326. 

Illinois.— Laws  of  1907,  p.  403;  Hurd's  Rev.  Stat.  1913,  ch.  98, 
p.  1670. 

Indiana. —  Laws  of  1913,  eh.  63;  Burns'  Anno.  Stat.  1914,  IV, 
p.  557. 

Iowa.— Laws  of  1902,  ch.  130;  Code  Supp.  1913,  tit.  XV,  ch.  3-A, 
p.  1272. 

Kansas.— Laws  of  1905,  ch.  310;  Gen.  Stat.  1909,  ch.  84. 

Kentucky.— Laws  of  1904,  ch.  102;  Carroll's  Stat.  1915,  p.  1903. 

Louisiana. —  Laws  of  1904,  Act  64. 

Maryland.— Laws  of  1898,  ch.  119;  Pub.  Gen.  Laws  1904,  art. 
13;  Pub.  Gen.  Laws  1911,  art.  13. 

Massachusetts. —  Laws  of  1898,  ch.  533;  Rev.  Laws  of  1899,  ch. 
130;  Rev.  Laws,  1902,  ch.  73;  Laws  of  1910,  ch.  417. 

Michigan.— Public  Acts  1905,  No.  265;  Howell's  Stat.  1913,  H, 
p.  1240. 

Minnesota. —  Laws  of  1913,  ch.  272. 

Missouri.— Laws  of  1905,  p.  243;  Rev.  Stat.  1909,  ch.  86. 

Montana. —  Laws  1903,  eh.  121 ;  Rev.  Civil  Code,  1907,  p.  1593. 

Nebraska.— Laws  of  1905,  ch.  83;  Rev.  Stat.  1913,  ch.  54. 

[lxxi] 


lxxii         ENACTMENTS   IN   STATES   AND   TERRITORIES. 

Nevada.—  Laws  of  1907,  ch.  62 ;  Rev.  Laws,  1912,  I,  p.  769. 

New  Hampshire. —  Laws  of  1909,  ch.  123;  Pub.  Stat.  Supp. 
1913,  p.  463. 

New  Jersey.— Laws  of  1902,  ch.  184 ;  Comp.  Stat.  1911,  p.  3734. 

New  Mexico.—  Laws  of  1907,  ch.  83. 

New  York.— Laws  of  1897,  ch.  612;  Laws  1909,  ch.  43;  Consol. 
Laws  1909,  ch.  38. 

North  Carolina.— Laws  of  1899,  ch.  733;  Rev.  1905,  ch.  54. 

North  Dakota. —  Laws  of  1899,  ch.  113;  Comp.  Laws,  1913,  ch. 
103,  p.  1622. 

Ohio.— Laws  of  1902,  p.  162;  Gen.  Code,  1910,  p.  1717. 

Oklahoma. —  Laws  of  1909,  ch.  24;  Rev.  Laws,  1910,  ch.  49, 
p.  1059. 

Oregon.— Laws  of  1899,  p.  18;  Lord's  Laws,  1910,  tit.  XL,  III, 
p.  2126. 

Pennsylvania. —  Laws  of  1901,  p.  194,  No.  162;  Laws  of  1909, 
p.  260,  No.  169. 

Rhode  Island.— Laws  of  1899,  ch.  674;  Gen.  Laws,  1909,  tit. 
XIX,  ch.  200. 

South  Carolina. —  Laws  of  1914,  ch.  396. 

South  Dakota. —  Laws  of  1913,  ch.  279;  Comp.  Laws,  1913,  II, 
p.  298. 

Tennessee.— Laws  of  1899,  ch.  94;  Code  Supp.  1903,  U  3505- 
3516. 

Utah.— Laws  of  1899,  ch.  83;  Comp.  Laws,  1907,  tit.  53,  p.  629. 

Vermont.— Laws  of  1912,  No.  99. 

Virginia.— Laws  of  1898,  ch.  866;  Laws  of  1906,  ch.  219;  Code, 
1904,  ch.  133a,  II,  p.  1455. 

Washington. —  Laws  of  1899,  ch.  149;  Rem.  &  Ball.  Codes  & 
Stats.  1909,  II,  p.  120. 

West  Virginia.— Acts  of  1907,  ch.  81;  Code  Anno.  1913,  II, 
p.  1894. 

Wisconsin.— Laws  of  1899,  ch.  356;  Stat.  1913,  p.  1180. 

Wyoming.— Laws  of  1905,  ch.  43;  Comp.  Stat.  1910,  ch.  210. 


THE  NEGOTIABLE  INSTRUMENTS  LAW 


THE  NEGOTIABLE  INSTRUMENTS  LAW 


A  general  act  relating  to  Negotiable  Instruments    (being  an  act  to 
establish  a  law  uniform  with  the  laws  of  other  States  on  that  subject.)  * 

Article  I.  General  provisions.     (%  190-196.) 

II.  Form  and  interpretation  of  negotiable 
instruments.     (§§  1-23.) 

III.  Consideration.     (§§  24-29.) 

IV.  Negotiation.     (§§  30-50.) 

V.  Rights  of  holder.     (§§  51-59.) 
VI.  Liabilities  of  parties.     (§§  60-69.) 
VII.  Presentment  for  payment.    (§§  70-88.) 
yill.  Notice  of  dishonor.     (§§  89-118.) 
IX.  Discharge   of  negotiable   instruments. 

m  H9-125.) 
X.  Bills  of  exchange;  form  and  interpre- 
tation.    (§§  126-131.) 
XL  Acceptance.    (§§  132-142.) 
XII.  Presentment  for  acceptance.     (§§  143- 

151.) 
XHI.  Protest.     (§§  152-160.) 
XIV.  Acceptance  for  honor.     (§§  161-170.) 
XV.  Payment  for  honor.     (§§  171-177.) 
XVI.  Bills  in  a  set.    (§§  178-183.) 
XVII.  Promissory  notes  and  checks.   (§§  184- 

189.) 
XVIII.  Notes  given  for  patent  rights  and  for 
a  speculative  consideration. 
XIX.  Laws  repealed;  when  to  take  effect. 

*  This  is  the  General  Title  proposed  by  the  CommissionerB  on  Uni 
formity  of  Laws,  and  used  in  many  of  the  States.     It  has  been  held 
sufficiently   comprehensive   under   a   constitutional   provision   providing 
that  no  law  shall  embrace  more  than  one  subject  to  be  expressed  in  the 
title.     Gilley  v.  Harrell,  118  Tenn.  115. 


THE   NEGOTIABLE   INSTRUMENTS   LAW. 

J 


ARTICLE  L 
General  Provisions.* 

Section  190.  Short  title. 

191.  Definitions  and  meaning  of  terms. 

192.  Primary  and  secondary  liability. 

193.  Reasonable  time — What  constitutes. 

194.  When  time  for  doing  act  falls  on  Sunday 

or  a  holiday. 

195.  Instruments  made  prior  to  Act. 

196.  Cases  not  provided  for  in  Act. 

Section  190.  Short  title. — This  act  shall  be  known 
as  the  negotiable  instruments  law. 

Variant  readings. — In  some  states  the  words  "  may  be  cited  " 
are  substituted  for  "  shall  be  known."  In  Arizona,  Connecticut, 
District  of  Columbia,  Kentucky,  Massachusetts,  Nebraska,  New 
Hampshire,  North  Carolina,  Ohio,  Rhode  Island,  and  Wisconsin 
the  section  is  omitted.  In  some  States  the  word  "  uniform  "  is 
inserted  before  the  word  "  negotiable." 

Application  of  the  statute — Non-negotiable  paper. — The  law  is 

confined  to  negotiable  instruments.  No  attempt  is  made  to  deal 
with  instruments  which  are  non-negotiable;  and  they  are  not  gov- 
erned by  the  statute.  In  determining  whether  the  rules  of  the 
statute  will  apply  to  any  particular  instrument,  it  is  first  neces- 
sary to  ascertain  whether  such  instrument  is  negotiable,  according 
to  the  terms  of  the  statute.  In  many  instances  the  rules  will  be 
the  same  for  instruments  of  either  kind;  but  that  is  not  because 
instruments  which  are  non-negotiable  are  governed  by  the  statute, 
but  because  the  statute  is  a  codification  of  common-law  rules 
which  before  its  adoption  applied  equally  to  both  classes  of  in- 
struments. In  other  words,  a  negotiable  instrument  is  governed 
by  the  statute  and  a  non-negotiable  instrument  by  the  rules  of 
the  common  law,  though  frequently  these  rules  will  be  the  same. 
For  example,  if  a  note  drawn  payable  at  a  bank  contains  terms 

*  In  most  of  the  States  these  general  provisions  are  put  at  the  end. 


GENERAL   PROVISIONS.  d 

which  render  it  non-negotiable,  the  provision  of  section  147,  that 
"  where  the  instrument  is  made  payable  at  a  bank  it  is  equivalent 
to  an  order  to  the  bank  to  pay  the  same  for  the  account  of  the 
principal  debtor  thereon,"  would  not  apply;  but  the  case  would 
be  governed  by  the  rule  of  the  common  law,  which  is  the  same 
as  the  statutory  rule  in  some  of  the  States,  but  different  in  others. 
This  distinction  must  be  carefully  borne  in  mind,  or  much  con- 
fusion will  result.  See  Windsor  Cement  Co.  v.  Thompson,  86 
Conn.  511;  Reynolds  v.  Vint,  73  Ore.  528;  Johnson  v.  Lassiter,  155 
N.  C.  47. 

Municipal    Bonds. — The    statute    applies    to    municipal    bonds. 
Borough  of  Montvale  v.  Peoples'  Bank,  74  N.  J.  L.  464. 

Construction  of  the  law. — For  several  years  some  of  the  courts 
were  disposed  to  give  the  statute  a  narrow  construction,  and  to 
limit  the  effect  of  the  language  whenever  a  literal  reading  would 
change  the  law  of  the  State;  and  these  courts,  in  construing  the 
statute,  treated  it  as  if  it  were  of  purely  local  origin  and  con- 
cern. But  the  courts  now  very  generally  recognize  that,  as  the 
law  was  different  in  the  different  States,  an  act  intended  to  be 
uniform  in  all  the  States,  must  necessarily  have  changed  local 
rules;  and  the  tendency  of  late  years  has  been  to  apply  the  lan- 
guage of  the  act  according  to  its  natural  import,  without  regard 
to  whether  or  not  the  effect  would  be  to  change  the  law  of  the 
state.  Thus,  the  Supreme  Court  of  Massachusetts,  after  observ-, 
ing  that  "it  is  matter  of  common  knowledge  that  the  Negotiable 
Instruments  Act  was  adopted  for  the  purpose  of  codifying  the 
law  upon  the  subject  of  negotiable  instruments,  and  making  it 
uniform  throughout  the  country,' '  said:  "The  language  of  the 
Act  is  to  be  construed  with  reference  to  the  object  to  be  attained. 
Its  words  are  to  be  given  their  natural  and  common  meaning, 
and  the  prevailing  principles  of  statutory  interpretation  are  to  be 
applied.  Care  should  be  taken  to  adhere  as  closely  as  possible 
to  the  obvious  meaning  of  the  act  without  resort  to  that  which 
had  theretofore  been  the  law  of  this  commonwealth,  unless  nec- 
essary to  dissipate  obscurity  or  doubt,  especially  in  instances 
where  there  is  a  difference  in  the  law  of  the  different  states." 
Union  Trust  Co.  v.  McGinty,  212  Mass.  205.  So,  the  Supreme 
Court  of  Wisconsin  has  said:  "Such  statute  was  enacted  for  the 
purpose  of  furnishing,  in  itself,  a  certain  guide  for  the  determi- 


4  THE   NEGOTIABLE   INSTRUMENTS   LAW. 

• 
mation  of  all  questions  covered  thereby  relating  to   commercial 
paper,  and,  therefore,  so  far  as  it  speaks  without  ambiguity  as 
to  any  such  question,  reference  to  case  law  as  it  existed  prior  to 
the  enactment  is  unnecessary  and  is  liable  to  be  misleading.     The 
negotiable  instruments  law  is  not  merely  a  legislative  codification 
of  judicial   rules  previously  existing  in  this   state,  making   that 
written  law  which  was  before  unwritten.    It  is,  so  far  as  it  goes, 
an   incorporation   into   written   law   of   the   common   law   of   the1 
state,  so  to  speak,  the  law  merchant  generally  as  recognized  here, 
with  such  changes  or  modifications  and  additions  as  to  make  a 
system  harmonizing,  so  far  as  practicable,  with  that  prevailing 
in  other  states.    That  it  contains  some  quite  material  changes  in 
previous  rules  governing  commercial  paper  we  have  had  occasion 
heretofore  to  point  out."    Columbian  Banking  Co.  v.  Bowen,  134 
Wis  218.  So,  in  a  late  case,  the  Court  of  Appeals  of  Kentucky  said : 
"The   Negotiable   Instruments  Act  was   adopted  by  the   several 
states  for  the  purpose  of  establishing  uniformity  in  the  law  regu- 
lating negotiable  instruments.    Where  the  act  speaks,  it  controls 
and  its  meaning  should  be  ascertained  by  interpreting  the  lan- 
guage used,  and  not  by  assuming  that  the  common  law  on  the 
subject  should  remain  unaltered."    First  State  Bank  v.  Williams, 
164  Ky.  143.    And  so,  the  Supreme  Court  of  Iowa  has  said  that 
in  construing  the  statute  the  court  is  to  keep  in  mind  that  the 
primary  object  in  adopting  it  was  to  establish  a  uniform  law.    And 
in  a  late  case  in  New  York  it  was  said:     "  When  the  question 
arises  under  one  of  the  uniform  statutes  relating  to  commercial 
paper  which  the  courts  of  this  state  have  not  yet  passed  upon,  it 
is  the  duty  of  trial  courts,  in  the  interest  of  a  real  uniformity  in 
the  application  of  such  statutes,  to  adopt  and  follow  the  inter- 
pretations thereof  made  by  the  courts  of  other  states. ' '    Brown  v. 
Brown,  91  Misc.  220.     To  the  same  effect,  see  also  Century  Bank 
v.  Breitbart,  89  Id.  308.    See  also  State  Bank  of  Halstad  v.  Bilstad, 
162  Iowa,  433;  Rockfield  v.  First  Nat.  Bank  of  Springfield,  77 
Ohio  St.  311 ;  Downey  v.  0  'Keef e,  26  R.  I.  571 ;,  Thorpe  v.  White, 
188    Mass.    333;    Toole    v.    Crafts,    193    Mass.    110;    Hartington 
Nat.  Bank  v.  Breslin,  88  Neb.  47;  Ex  parte  Goldberg  &  Lewis,  67 
So.  Rep.  (Ala.)  839;  Windsor  Cement  Co.  v.  Thompson,  86  Conn. 
511;  B.  &  0.  R.  R.  Co.  v.  First  Nat.  Bank,  102  Va.  753;  Vander 
Ploeg  v.  Van  Zuuk,  35  Iowa,  350;  Holliday  State  Bank  v.  Hoffman, 
85  Ivans.  71;  First  Nat.  Bank  v.  Miller,  139  Wis.  126;  Cherokee 
Nat.  Bank  v.  Union  Trust  Co.,  33  Okla.  342;  Baumeister  v.  Kuntz, 


GENERAL   PROVISIONS.  5 

53  Fla.  340;  Farquhar  Co.  v.  Higham,  16  N.  D.  106;  McCarthy  v. 
Kepreta,  24  N.  D.  395;  Lightner  v.  Roach,  95  Atl.  Rep.  (Md.)  62; 
First  Nat.  Bank  v.  Meyer,  152  N.  W.  Eep.  (N.  D.)  657;  Trustees 
of  Am.  Bank  v.  McComb,  105  Va.  473;  Payne  v.  Zell,  98  Va.  249; 
American  Trust  Co.  v.  Canevin,  184  Fed.  Rep.  657.  And  as  the 
statute  was  adopted  for  the  purpose  of  producing  uniformity,  the 
courts,  in  construing  it,  seek  to  aid  that  purpose.  See  cases  cited 
above. 

Enactment  in  other  states — Judicial  notice. — But  though  the 
courts  in  construing  the  act  take  cognizance  of  the  fact  that  it 
has  been  adopted  in  other  states,  yet,  in  a  case  arising  under  the 
laws  of  another  state,  the  court  will  not  take  judicial  notice  that 
it  has  been  enacted  in  that  state;  but,  in  the  absence  of  evidence 
upon  the  subject,  will  presume  that  the  law  of  such  state  is  the 
same  as  the  common  law  before  the  enactment.  Demelman  v. 
Brazier,  193  Mass.  589.  Hence,  the  adoption  of  the  statute  in 
the  state  where  the  cause  of  action  arose  must,  where  the  action 
is  brought  in  another  state,  be  proved  as  a  fact.  But  see  Gleason 
v.  Thayer,  87  Conn.  248,  251. 

Rule  in  Federal  court. — While  doubt  has  sometimes  been  ex- 
pressed as  to  how  far  the  Federal  courts  would  be  bound  by  the 
statute,  the  question  appears  to  be  simple  enough  upon  principle. 
A  man  making,  or  drawing,  or  indorsing  a  negotiable  instrument 
does  so  with  respect  to  the  law  as  it  exists  at  the  time.  If  there 
is  no  statute  on  the  subject,  then  the  contract  is  made  with  refer- 
ence to  the  law  merchant,  and  as  to  what  this  law  is  the  Federal 
courts  are  not  bound  by  the  decisions  of  the  State  courts.  But 
where  the  law  under  which  the  parties  contract  is  statutory,  then 
it  is  the  statute,  and  not  the  law  merchant,  by  which  the  contract 
is  to  be  governed;  and  the  Federal  court  in  such  case  has  not  to 
determine  what  the  law  is,  but  has  merely  to  apply  the  statute. 
Hence,  it  has  been  held  that  though  the  Federal  court  is  not  bound 
to  follow  the  vieAv  expressed  by  the  highest  court  of  the  state 
as  to  any  rule  of  the  law  merchant,  yet  where  the  state  has  en- 
acted the  Negotiable  Instruments  Law,  and  its  provisions  are  ap- 
plicable, the  Federal  court  is  bound  to  give  effect  to  the  statute. 
Smith  v.  Nelson  Land  &  Cattle  Co.,  212  Fed.  Rep.  56.  And  in 
Schmidt  v.  Bank  of  Commerce,  234  U.  S.  64,  the  Supreme  Court 
appears  to  have  assumed  that  the  statute  would  apply. 


6  THE   NEGOTIABLE  INSTRUMENTS  LAW. 

§  191.  Definitions  and  meaning  of  terms. — In  this 
act,  unless  the  context  otherwise  requires: 

"Acceptance  "  means  an  acceptance  completed  by 
delivery  or  notification. 

"Action  "  includes  counter-claim  and  set-off. 

"  Bank  "  includes  any  person  or  association  of  per- 
sons carrying  on  the  business  of  banking,  whether  in- 
corporated or  not. 

"  Bearer  "  means  the  person  in  possession  of  a  bill 
or  note  which  is  payable  to  bearer. 

1 '  Bill  ' '  means  bill  of  exchange,  and  ' '  note  ' '  means 
negotiable  promissory  note. 

' '  Delivery  ' '  means  transfer  of  possession,  actual  or 
constructive,  from  one  person  to  another. 

"  Holder  "  means  the  payee  or  indorsee  of  a  bill  or 
note,  who  is  in  possession  of  it,  or  the  bearer  thereof. 

"  Indorsement  "  means  an  indorsement  completed 
by  delivery. 

"  Instrument  "  means  negotiable  instrument. 

' '  Issue  ' '  means  the  first  delivery  of  the  instrument, 
complete  in  form,  to  a  person  who  takes  it  as  a  holder. 

"  Person  "  includes  a  body  of  persons,  whether  in- 
corporated or  not. 

"  Value  "  means  valuable  consideration. 

"  "Written  "  includes  printed,  and  "  writing  "  in- 
cludes print. 

§  192.  Primary  and  secondary  liability.— The  per- 
son "primarily"  liable  on  an  instrument  is  the  person 
who  by  the  terms  of  the  instrument  is  absolutely  re- 
quired to  pay  the  same.  All  other  parties  are  "  sec- 
ondarily "  liable. 

Variant  readings. — In  Kansas  the  last  sentence  of  this  section 
is  omitted. 


GENEKAL   PROVISIONS.  7 

Construction  of  section. — This  section  is  to  be  construed  in  con- 
nection with  section  18,  which  provides  that  "no  person  is  liable 
'jn  the  instrument  whose  signature  does  not  appear  thereon;"  and 
also  with  section  127,  which  provides  that  "the  drawee  is  not  liable 
on  the  bill  unless  and  until  he  accepts  the  same;"  and  with  section 
189,  which  provides  that '  *'  the  bank  is  not  liable  to  the  holder  unless 
and  until  it  accepts  or  certifies  the  check."  These  are  not,  by  the 
terms  of  the  instrument,  absolutely  required  to  pay  the  same  until 
such  acceptance  or  certification.  In  Rouse  v.  Wooten  (140  N.  C. 
557,  55S),  it  was  said:  "A  surety  comes  squarely  within  the  defini- 
tion of  a  person  whose  liability  is  primary,  for  he  is  by  the  terms 
of  the  instrument  absolutely  required  to  pay  the  same."  But  ob- 
viously this  would  not  be  so  in  the  case  of  one  signing  as  "  guaran- 
tor," since  he  is  liable  only  where  there  is  default  by  the  party 
whose  obligation  he  has  guaranteed. 

Accommodation  maker. — The  question  whether  a  party  is 
"  primarily "  or  "  secondarily "  liable  is  to  be  determined  by  his 
relation  to  the  paper  itself,  and  not  by  his  agreement  with  some 
other  party;  and  hence  the  maker  is  "  primarily  "  liable,  even 
though  he  has  signed  for  the  accommodation  of  the  indorser.  See 
note  to  section  120,  and  cases  there  cited. 

§  193.  Reasonable  time  —  what  constitutes. — In  de- 
termining what  is  a  "  reasonable  time  "  or  an  "  un- 
reasonable time, ' '  regard  is  to  be  had  to  the  nature  of 
the  instrument,  the  usage  of  trafie  or  business  (if  any) 
with  respect  to  such  instruments,  and  the  facts  of  the 
particular  case. 

Whether  question  one  of  law  or  fact. — Where  the  facts  are 
doubtful  or  disputed,  the  question  of  reasonable  time  is  a  mixed 
question  of  law  and  fact.  But  when  the  facts  are  clear  and  un- 
disputed, the  question  is  one  of  law  for  the  court.  Commercial 
Nat.  Bank  v.  Zimmerman,  185  N.  Y.  310;  German  Am.  Bank 
v.  Mills,  99  App.  Div.  (N.  Y.)  312;  Prescott  Bank  v.  Coverly,  7 
Gray,  217;  Gilmore  v.  Wilbur,  12  Pick.  124;  Holbrook  v.  Burt,  22 
Pick.  555 ;  Northwestern  Coal  Co.  v.  Bowman,  69  Iowa,  153 ;  Aymar 
v.  Beers,  7  Cow.  705;  Tomlinson  Carriage  Co.  v.  Kinsella,  31 
Conn.  273.    See  note  to  section  131. 


8  THE   NEGOTIABLE   INSTRUMENTS  LAW. 

§  194.  When  time  for  doing  act  falls  on  Sunday  or 
holiday. — Where  the  day,  or  the  last  day,  for  doing 
any  act  herein  required  or  permitted  to  be  done  falls 
on  Sunday  or  on  a  holiday,  the  act  may  be  done  on  the 
next  succeeding  secular  or  business  day. 

Variant  readings. — In  North  Carolina  this  section  is  omitted. 

Origin  of  section. — This  section  was  adapted  from  sections  26 
and  27  of  the  New  York  Statutory  Construction  Law. 

§  195.  Instruments  made  prior  to  act. — The  provi- 
sions of  this  act  do  not  apply  to  negotiable  instruments 
made  and  delivered  prior  to  the  passage  hereof. 

Variant  readings. — This  section  is  omitted  in  Arizona  and 
Florida.  In  Minnesota  the  following  is  added  at  the  end  of  the 
section:  "  Nor  shall  they  be  construed  as  modifying,  repealing 
or  superseding  any  of  the  terms  and  provisions  of  section  2747, 
Revised  Laws,  1905."  In  South  Dakota  the  section  reads:  "Noth- 
ing in  this  Act  contained  shall  be  construed  as  in  any  manner  re- 
pealing chapters  128,  140  and  141  of  the  Laws  of  1905,  and  chap- 
ter 74  of  the  Laws  of  1907." 

Time  when  statute  took  effect. — As  to  when  the  act  took  effect 
in  the  different  states,  see  Walker  v.  Dunham,  135  Mo.  App.  390; 
Gate  City  Bank  v.  Schmidt,  168  Mo.  App.  153;  First  Nat.  Bank 
v.  Bertoli,  88  Vt.  421;  Dorsey  v.  Wellman,  85  Neb.  262;  Dotson 
v.  Owsley,  141  Ky.  452;  Fassler  v.  Streit,  92  Neb.  786. 

Paper  made  before,  and  indorsed  after,  act  took  effect. — Where 
paper  was  made  and  delivered  prior  to  the  adoption  of  the  act, 
the  liability  of  indorsers  thereon  is  to  be  determined  by  the  law 
as  it  existed  then,  though  such  indorsements  were  made  after  the 
date  on  which  the  act  was  to  go  into  effect.  Mackintosh  v.  Gibbs, 
81  N.  J.  L.  37;  Gate  City  Nat.  Bank  v.  Schmidt,  168  Mo.  App.  153. 

§  196.  Cases  not  provided  for  in  act. — In  any  case 
not  provided  for  in  this  act  the  rules  of  the  law  mer- 
chant shall  govern. 


GENERAL   PROVISIONS.  9 

Variant  readings. — In  many  of  the  states  the  section  reads: 
"  The  rules  of  law  and  equity,  including  the  law  merchant."  But 
just  what  this  means  might  be  difficult  to  determine.  Of  course, 
if  the  statute  does  not  apply,  the  rules  of  law  and  equity  must 
govern.  But  what  rules?  The  Law  Merchant  is  a  distinct  branch 
of  law,  and  under  it  certain  rules  have  grown  up;  and,  hence,  when 
we  speak  of  the  rules  of  the  law  merchant,  we  convey  the  idea  of 
a  definite  set  of  rules.  But  when  we  speak  of  "  the  rules  of  law 
and  equity  including  the  law  merchant,"  we  mean — if  we  mean 
anything  at  all — the  whole  body  of  the  law,  and  the  vagueness  of 
the  statement  obscures  and  confuses.  For  a  lucid  exposition  of 
this  subject,  see  the  report  of  the  Committee  on  Uniformity  of 
Judicial  Decisions  in  Cases  arising  under  Uniform  Laws.  Pro- 
ceedings Twenty-Fourth  Conference   (1914),  p.  244. 

Prior  statutes. — It  is  to  be  observed  that  the  rules  governing 
in  such  cases  are  not  those  which  existed  by  virtue  of  a  statute. 
In  most  of  the  states  all  prior  statutes  upon  the  subject  of  bills 
and  notes  are  repealed;  and  where  a  case  arises  which  is  not  pro- 
vided for  in  the  Negotiable  Instruments  Law,  it  is  not  to  be  deter- 
mined by  resort  to  any  of  the  former  statutes,  but  by  reference  to 
the  rules  of  the  law  merchant.  In  a  few  of  the  states,  however, 
certain  statutes  are  expressly  excepted  from  the  effect  of  the  repeal- 
ing clause.    These  are  indicated  in  the  notes. 


10  THE  NEGOTIABLE  INSTRUMENTS  LAW. 


ARTICLE  II. 

Foem  and  Interpretation 

Section    1.  Requirements  in  general. 

2.  When  sum  payable  is  certain. 

3.  "When  promise  is  unconditional. 

4.  Determinable  future  time;  what  consti- 

tutes. 

5.  Provisions  which  do  not  impair  negotia- 

bility. 

6.  Matters  not  affecting  validity,  etc. 

7.  When  payable  on  demand. 

8.  When  payable  to  order. 

9.  When  payable  to  bearer. 

10.  What  terms  sufficient. 

11.  Presumption  as  to  date. 

12.  Ante-dated  and  post-dated. 

13.  When  date  may  be  inserted. 

14.  Filling  blanks — rights  of  holder. 

15.  Incomplete  instrument  not  delivered. 

16.  Necessity  for  delivery — presumption. 

17.  Construction  where  instrument  is  ambig- 

uous. 

18.  Only  person  signing  liable — trade  name. 

19.  Signature    by    agent  —  authority  —  how 

shown. 

20.  Signature  on  behalf  of  principal. 

21.  Signature  by  procuration  —  effect  of. 

22.  Indorsement  by  infant  or  corporation. 

23.  Forged  signature  inoperative — estoppel. 


FORM   AND  INTERPRETATION.  11 

§  1.  Requirements  to  which  instrument  must  con- 
form.— An  instrument  to  be  negotiable  must  conform 
to  the  following  requirements: 

1.  It  must  be  in  writing  and  signed  by  the  maker  or 
drawer ; 

2.  Must  contain  an  unconditional  promise  or  order 
to  pay  a  sum  certain  in  money; 

3.  Must  be  payable  on  demand,  or  at  a  fixed  or  de- 
terminable future  time; 

4.  Must  be  payable  to  order,  or  to  bearer ;  and 

5.  Where  the  instrument  is  addressed  to  a  drawee, 
he  must  be  named  or  otherwise  indicated  therein  with 
reasonable  certainty. 

Variant  readings. — In  Arizona,  Idaho,  Iowa,  Kentucky,  North 
Carolina  and  Wyoming  subdivision  four  reads  as  follows :  ' '  Must 
be  payable  to  the  order  of  a  specified  person  or  bearer."  But 
the  words  "  specified  person  "  are  surplusage,  since  by  section 
8  this  is  declared  to  be  the  effect  of  the  term  "order."  In  Wis- 
consin a  provision  is  added  to  subdivision  five  as  follows:  "But 
no  order  drawn  upon  or  accepted  by  the  treasurer  of  any  county, 
town,  city,  village  or  school  district,  whether  drawn  by  any  of- 
ficer thereof  or  any  other  person,  and  no  obligation  nor  instru- 
ment made  by  any  such  corporation,  or  any  officer  thereof,  un- 
less expressly  authorized  by  law  to  be  made  negotiable,  shall  be, 
or  shall  be  deemed  to  be,  negotiable  according  to  the  custom  of 
merchants,  in  whatever  form  they  may  be  drawn  or  made.  Ware- 
house receipts,  bills  of  lading  and  railroad  receipts  upon  the  face 
of  which  the  words  '  not  negotiable  '  shall  not  be  plainly  written, 
printed  or  stamped,  shall  be  negotiable  as  provided  in  section  1676 
of  the  Wisconsin  Statutes  of  1878,  and  in  sections  4194  and  4425 
of  these  statutes,  as  the  same  have  been  construed  by  the  Su- 
preme Court." 

Form  of  writing. — It  is  not  necessary  that  the  instrument  or 
any  of  the  signatures  thereto  should  be  in  ink ;  but  the  writing  may 
be  in  pencil.  Geary  v.  Physic,  5  Barn.  &  Cress.  234;  Brown  v. 
Butchers'  &  Drovers'  Bank,  6  Hill  443.  And  one  may  become  a 
party  to  the  paper  by  any  mark  or  designation  he  chooses  to  adopt, 


12  THE   NEGOTIABLE   INSTRUMENTS   LAW. 

provided  it  be  used  as  a  substitution  for  bis  name,  and  be  intend 
to  bind  bimself.  Baker  v.  Dening,  8  Adol.  &  Ellis,  94;  Brown  v. 
Biitchers'  &  Drovers'  Bank  (supra).  In  the  case  last  cited  the  in- 
dorsement was  made  with  a  lead  pencil,  and  in  figures  thus,  "  1,  2,. 
8,"  no  name  being  written;  and  it  was  held  that,  the  jury  having 
found  that  the  figures  were  made  by  B  as  a  substitution  for  his 
proper  name,  intending  to  be  bound  thereby,  he  was  liable. 

Proof  of  signature. — The  signature  may  be  proven  by  the  tes- 
timony of  one  who  saw  it  placed  there,  or  by  the  testimony  of 
those  who  are  familiar  with  the  handwriting  of  the  person  whose 
signature  it  purports  to  be,  or  who  have  seen  him  write  and 
know  his  signature,  or  it  may  be  proven  by  the  testimony  of  ex- 
perts, by  comparison,  or  by  comparison  by  the  jury,  with  writing 
proved  to  be  genuine.    In  re  Estate  of  Chismore,  166  Iowa,  217. 

Instruments  payable  otherwise  than  in  money. — The  rule  of  the 
law  merchant  that  the  instrument  must  be  payable  in  money,  pre- 
vailed in  most  of  the  states.  But  in  some  states — as,  for  example, 
in  Georgia — certain  instruments  are  declared  by  statute  to  be  nego- 
tiable, though  they  provide  that  payment  is  to  be  made  in  goods  or 
merchandise.  See  also  section  6,  subdivision  5.  In  New  York 
warehouse  receipts  issued  by  certain  corporations  are  declared  to  be 
negotiable.  See  Hanover  Nat.  Bank  v.  American  Dock  and  Trust 
Co.,  148  N.  Y.  612;  Corn  Exchange  Bank  v.  Same,  149  N.  Y.  174. 
The  act  does  not  repeal  these  statutes.  An  instrument  which,  by 
its  true  construction  is  an  unconditional  order  to  pay  a  certain 
sum  of  money  at  a  fixed  future  time,  to  the  payee  or  order,  is  a  bill 
of  exchange  under  the  terms  of  the  statute.  Torpey  v.  Tebo,  184 
Mass.  307. 

Instruments  not  payable  to  order  or  bearer. — By  the  law  mer- 
chant an  instrument  payable  to  a  particular  person  and  not  to 
his  order  or  to  bearer  was  not  negotiable.  Backus  v.  Danforth, 
10  Conn.  297.  As  to  bonds  payable  to  bearer  and  coupons,  see 
Carr  v.  Leferre,  27  Pa.  St.  413;  County  of  Beaver  v.  Armstrong, 
44  Pa.  St.  63;  Nat.  Exchange  Bank  v.  Hartford,  etc.,  R.  R.  Co., 
8  R.  I.  375.  As  to  Treasury  notes,  see  Frazer  v.  D'Quillers,  2 
Pa.  St.  200.  See  section  9.  An  instrument  which  is  not  payable 
to  order  or  bearer  is  not  within  the  terms  of  the  statute.  Owen  v. 
Blackburn,  161  App.  Div.  (N.  Y.)  827;  Kerr  v.  Smith,  156  Id.  807; 
Hilborn  v.  Pennsylvania  Cement   Co.,  145   Id.   422;  Westberg  v. 


FORM  AND  INTERPRETATION.  13 

Chicago  L.  &  C.  Co.,  117  Wis.  589.  In  Tennessee  the  Act  has  re- 
pealed Shannon's  Code,  §  3506,  providing  that  every  note,  whether 
payable  to  order  or  not,  shall  be  negotiable  in  the  same  manner  as 
promissory  notes.     Gilley  v.  Harrell,  118  Tenn.  115. 

Uncertainty  as  to  amount. — The  negotiable  character  of  a  note 
is  destroyed  by  a  provision  therein  reciting  that  if  the  maker 
allow  the  taxes  or  any  other  public  rates  and  assessments  on  the 
mortgaged  property  to  become  delinquent,  or  in  case  any  taxes  or 
assessments  shall  be  levied  against  the  holder  on  account  of  the 
note,  then  the  whole  amount  secured  shall  become  due  and  pay- 
able and  the  mortgagee  may  at  once  proceed  to  collect  the  note 
and  foreclose  the  mortgage  given  to  secure  the  same,  since  there 
is  an  implication,  that  the  maker  of  the  note  is  charged  with  the 
payment  of  the  taxes,  etc.,  the  amount  of  which  is  uncertain. 
Bright  v.  Offield,  81  Wash.  442.  But  a  promissory  note  is  not 
rendered  non-negotiable  by  the  insertion  of  the  following  provi- 
sion: "A  discount  of  6  per  cent,  will  be  allowed  if  paid  in  full 
within  fifteen  days  from  date."  Farmers'  Loan  &  Trust  Co.  v. 
Planck,  152  N.  W.  Kep.  (Neb.)  390.    See  note  to  section  2. 

Words  ' '  without  defalcation. ' ' — The  words  ' '  without  defalca- 
tion," sometimes  used  in  notes  and  bills,  add  nothing  whatever  to 
the  force  and  effect  of  the  instrument,  either  before  or  after  matu- 
rity, and  are  mere  surplusage.  First  Nat.  Bank  v.  Lewis,  57  Colo. 
125,  131.  In  this  case  the  court  said:  "These  words  are  nothing 
more  than  a  relic  of  pronounced  antiquity  in  the  law,  a  mere 
remnant  of  common-law  forms,  and  wholly  without  meaning  in 
the  light  of  modern  usage  under  the  practically  uniform  provi- 
sions of  the  Negotiable  Instruments  Law  now  in  force  in  this  and 
many  other  states." 

§  2.  When  sum  payable  is  a  sum  certain. — The  sum 

payable  is  a  sum  certain  within  the  meaning  of  this 
act,  although  it  is  to  be  paid: 

1.  "With  interest;  or 

2.  By  stated  instalments;  or 

3.  By  stated  instalments,  with  a  provision  that  upon 
default  in  payment  of  any  instalment  or  of  interest  the 
whole  shall  become  due;  or 


14  THE   NEGOTIABLE  INSTRUMENTS   LAW. 

4.  With  exchange,  whether  at  a  fixed  rate  or  at  the 
current  rate;  or 

5.  With  costs  of  collection  or  an  attorney's  fee,  in 
case  payment  shall  not  be  made  at  maturity. 

Variant  readings. — In  Idaho,  Iowa,  North  Carolina  and  Wyom- 
ing, the  words  "  or  of  interest  "  in  subdivision  three  are  omitted. 
In  Nebraska  a  proviso  is  added  to  subdivision  five  as  follows: 
"Provided,  that  nothing  herein  contained  shall  be  construed  to 
authorize  any  court  to  include  in  any  judgment  on  an  instrument 
made  in  this  state  any  sum  for  attorney's  fees  or  other  costs  not 
allowable  in  other  cases."    In  North  Carolina  an  additional  sec- 
tion is  added  as  follows:     "Nothing  in  this  chapter  shall  au- 
thorize the  enforcement  of  an  authorization  to  confess  judgment 
or  a  waiver  of  homestead  and  personal  property  exemptions  or  a 
provision  to  pay  counsel  fees  for  collection  incorporated  in  any 
of  the  instruments  mentioned  in  this  chapter;  but  the  mention  of 
such  provision  in  such  instrument  shall  not  affect  the  other  terms 
of   such   instruments  or   the   negotiability  thereof."     Revisal   of 
1905,  section  2346.    In  South  Dakota  the  following  is  substituted 
for  subdivision  five:     "  Provided,  that  nothing  herein  contained 
shall  be  construed  to  authorize  any  court  to  include  in  any  judg- 
ment or  an  instrument  made  in  this  state  any  sum  for  attorney's 
fees,  or  other  costs  not  now  taxable  by  law." 

Payment'  by  installments. — Promissory  notes  are  not  infre- 
quently made  payable  in  this  way,  and  the  negotiable  character 
of  a  note  so  payable  was  well  established.  Markey  v.  Casey,  108 
Mich.  184;  Wright  v.  Irwin,  33  Mich.  32.  In  this  case  the  note 
was  for  $1500,  to  be  paid  twenty  per  cent,  a  month  from  the  1st 
of  July,  1871.  For  cases  arising  under  subdivision  three,  see  Hodge 
v.  Wallace,  129  Wis.  84;  Bright  v.  Offield,  81  Wash.  442. 

Payment  of  exchange. — The  rule  prescribed  in  the  statute  is 
that  adopted  by  most  of  the  courts  which  had  passed  upon  this 
point.  See  Second  National  Bank  of  Aurora  v.  Basuier,  65  Fed. 
Rep.  58;  Hastings  v.  Thompson,  54  Minn.  184;  Flagg  v.  School 
District,  4  N.  D.  30;  Whittle  v.  Fond  du  Lac  National  Bank  (Tex.), 
26  S.  W.  Rep.  1106.    Contra,  Culbertson  v.  Nelson,  93  Iowa,  187. 

Stipulation  for  Attorney's  Fees.— On  the  question  whether  a 
stipulation  for  an  attorney's  fee  rendered  the  paper  non-negoti- 


FORM  AND  INTERPRETATION.  15 

able,  there  "was  much  conflict  in  the  decisions.  The  rule  adopted 
in  the  Act  is  the  one  sustained  by  the  weight  of  authority.  It  is 
supported  by  National  Bank  v.  Sutton  Mfg.  Co.,  6  U.  S.  App.  312, 
331 ;  Oppenheimer  v.  Farmers'  and  Merchants'  Bank,  97  Tenn.  19 ; 
Montgomery  v.  Crossthwait,  90  Ala.  553;  Trader  v.  Chichester, 
41  Ark.  242;  Stapleton  v.  Louisville  Banking  Co.,  95  Ga.  802; 
Dorsey  v.  Wolff,  142  111.  589;  Stoneman  v.  Pyle,  35  Ind.  103; 
Shenandoah  Nat.  Bank  v.  Marsh,  89  Iowa  173 ;  Benn  v.  Kutzschan, 
24  Oregon  28;  Seaton  v.  Scoville,  18  Kans.  433;  Dietrich  v. 
Boylie,  23  La.  Ann.  767;  Second  National  Bank  v.  Anglin,  6 
Wash.  403;  Heard  v.  Dubuque  Bank,  8  Neb.  10;  Stark  v.  Olsen, 
44  Neb.  646.  The  courts  which  adopted  this  rule  took  the 
view  that  so  long  as  the  amount  payable  is  certain  up  to 
the  time  of  maturity  and  dishonor,  it  is  not  essential  that  after 
that  time,  when  the  instrument  has  become  non-negotiable  for 
other  reasons,  the  certainty  as  to  the  amount  should  continue. 
In  the  Tennessee  case  above  cited  the  court  said:  "  Upon  a 
careful  review  of  the  authorities,  we  can  perceive  no  reason  why 
a  note  otherwise  imbued  with  all  the  attributes  of  negotiability  is 
rendered  non-negotiable  by  a  stipulation  Avhich  is  entirely  inoper- 
ative until  after  the  maturity  of  the  note  and  its  dishonor  by  the 
maker.  The  amount  to  be  paid  is  certain  during  the  currency  of 
the  note  as  a  negotiable  instrument,  and  it  only  becomes  uncertain 
after  it  ceases  to  be  negotiable  by  the  default  of  the  maker  in  its- 
payment.  It  is  eminently  just  that  the  creditor  who  has  incurred 
an  expense  in  the  collection  of  the  debt  should  be  reimbursed  by 
the  debtor  by  whom  the  action  was  rendered  necessary,  and  the 
expense  entailed."  The  statute  has  changed  the  law  in  Mary- 
land (Maryland  Fertilizing  Co.  v.  Newman,  60  Md.  584) ;  North 
Carolina  (First  National  Bank  v.  Bynum,  84  N.  C.  24) ;  Pennsyl- 
vania (Woods  v.  North,  84  Pa.  St.  407) ;  Oklahoma  (American 
Nat.  Bank  v.  Halsell,  43  Okl.  126).  See  also  Jones  v.  Rodetz,  27 
Minn.  240;  First  Nat.  Bank  v.  Gay,  63  Mo.  38;  First  Nat.  Bank 
v.  Larsen,  60  Wis.  206;  Morgan  v.  Edwards,  53  Wis.  599;  Sylves- 
ter Bleckley  Co.  v.  Alewine,  48  S.  C.  308.  The  question  does  not 
appear  to  have  been  passed  upon  by  the  New  York  courts. 

Where  amount  of  attorney's  fee  not  fixed. — Under  this  section 
it  is  not  necessary  that  the  amount  of  the  attorney's  fee  should  be 
named;  but  a  stipulation  for  a  reasonable  attorney's  fee  is  within 


10  THE   NEGOTIABLE   INSTRUMENTS   LAW. 

the  meaning  of  subdivision  five.    Potts  v.  Crudup,  150  Pac.  Rep. 
(Okl.)  170;  McCormiek  v.  Swem,  36  Utah,  G. 

Same  subject— Effect  of  the  statute. — In  the  previous  editions 
of  this  work,  the  view  was  expressed  that  as  the  statute  does  not 
declare  that  a  stipulation  for  an  attorney's  fee  shall  be  valid,  but 
merely  that  it  shall  not  render  the  paper  non-negotiable,  no  change 
has  been  made  in  the  law  in  those  states  where  such  stipulations 
were  held  to  be  void  as  against  public  policy;  and  this  view  has 
been  since  adopted  in  Ohio  and  West  Virginia.  Miller  v.  Kyle, 
85  Ohio  St.  186;  Raleigh  County  Bank  v.  Poteet,  74  W.  Va. 
511.  Where  such  a  stipulation  is  valid  under  the  law  of  the 
state  where  the  instrument  is  made  and  is  payable,  it  will  be  en- 
forced in  an  action  brought  in  New  York.  First  Nat.  Bank  v. 
Fleitmann,  168  App.  Div.  (N.  Y.)  75.  For  cases  in  which  subdivi- 
sion five  has  been  applied,  see  Oglesby  v.  Bank  of  New  York,  114 
Va.  663;  First  National  Bank  v.  Miller,  139  Wis.  126;  Carsey  v. 
Swan,  150  Ky.  473;  Davis  v.  McCall,  176  Mo.  App.  198;  Bank  of 
Neelyville  v.  Lee,  182  Mo.  App.  185;  First  Nat.  Bank  v.  Stam, 
186  Mo.  App.  439;  Pityer  v.  McCune,  152  111.  App.  145;  Bright 
v.  Offield,  81  Wash.  442;  Mechanics'  Amer.  Nat.  Bank  v.  Cole- 
man, 204  Fed.  Rep.  24. 

§  3.  When  promise  is  unconditional. — An  unquali- 
fied order  or  promise  to  pay  is  unconditional  within 
the  meaning  of  this  act,  though  coupled  with: 

1.  An  indication  of  a  particular  fund  out  of  which 
reimbursement  is  to  be  made,  or  a  particular  account 
to  be  debited  with  the  amount;  or 

2.  A  statement  of  the  transaction  which  gives  rise 
to  the  instrument. 

But  an  order  or  promise  to  pay  out  of  a  particular 
fund  is  not  unconditional. 

Indication  of  Particular  Fund. — The  mere  mention  of  a  fund 
in  a  draft  does  not  necessarily  deprive  it  of  the  character  of  com- 
mercial paper,  but  it  must  further  appear,  in  order  to  have  such 
effect,  that  it  contains  either  an  express  or  implied  direction  to 
pay  it  therefrom,  and  not  otherwise.     Schmittler  v.   Simon,  101 


FORM   AND  INTERPRETATION.  17 

N.  Y.  554,  560.  In  the  case  cited,  a  draft  drawn  upon  an  ex- 
ecutor contained  the  words,  "  and  charge  the  amount  against  me 
and  of  my  mother's  estate."  It  was  held  that  the  reference  to 
the  estate  was  not  a  direction  to  pay  out  of  it,  but  that  the  estate 
was  referred  to  simply  as  a  means  of  reimbursement.  So,  in 
Macleod  v.  Luce,  2  Stra.  762 ;  2  Ld.  Raym.  1481,  where  the  instru- 
ment contained  the  words,  "  as  my  quarterly  half -pay  to  be  due 
from  24th  of  June  to  27th  of  September  next,  by  advance,"  the 
court  said,  "  The  mention  of  the  half-pay  is  only  by  way  of  direc- 
tion how  he  shall  reimburse  himself,  but  the  money  is  still  to  be 
advanced  on  the  credit  of  the  person;"  and  the  court  accordingly 
held  the  instrument  to  be  a  bill  of  exchange.  Likewise,  in  Red- 
man v.  Adams.  51  Me.  433,  where  the  drawer  added,  "  and  charge 
the  same  against  whatever  amount  may  be  due  me  for  my  share 
of  fish,"  it  was  held  that  these  words  were  a  mere  indication  of 
the  means  of  reimbursement,  and  did  not  destroy  the  negotiable 
character  of  the  draft.  And  a  similar  ruling  was  made  in  Whit- 
ney v.  Eliot  National  Bank  137  Mass.  351,  where  the  directions 
were,  "  charge  the  same  to  account  of  250  bbls.  meal  ex-schooner 
*  Aurora  Borealis  '  ".  See  also  Nichols  v.  Ruggles,  76  Me.  27. 
The  test  is  whether  the  drawee  is  confined  to  the  particular  fund, 
or  whether,  though  a  specified  fund  is  mentioned,  he  could  have 
the  power  to  charge  the  bill  up  to  the  general  account  of  the 
drawer,  if  the  designated  fund  should  turn  out  to  be  insufficient. 
Munger  v.  Shannon,  61  N.  Y.  251,  255.  A  draft  in  the  following 
form:  "  Pay  to  the  order  of  the  First  National  Bank  of  Hutch- 
inson, Kansas,  $1,500  on  account  of  contract  between  you  and  the 
Snyder  Plaining  Mill  Company  "  was  held  negotiable,  the  words 
"  on  account  of,"  etc.,  being  deemed  an  indication  of  the  fund 
to  which  the  drawee  was  to  look  for  reimbursement,  and  not  a 
direction  to  charge  a  particular  fund.  First  Nat.  Bank  of  Hutch- 
inson v.  Lightner,  74  Kan.  736. 

Statement  of  transaction. — An  example  of  a  statement  of  this 
sort  is  a  note  expressed  to  be  in  payment  of  certain  tracts  of  land. 
First  Nat.  Bank  of  Michael,  96  N.  C.  53.  But  the  most  frequent  in- 
stances are  notes  given  in  payment  of  the  purchase  price  of  goods 
and  chattels.  Thus,  in  Chicago  Railway  Equipment  Co.  v.  Mer- 
chants' Nat.  Bank,  136  U.  S.  268,  it  was  held  that  the  negotiable 
character  of  a  promissory  note  was  not  affected  by  a  provision  that 
it  was  given  with  others  in  payment  for  certain  cars,  the  title  to 
2 


18  THE   NEGOTIABLE  INSTRUMENTS  LAW. 

which  should  remain  in  the  payee  until  all  the  notes  of  the  series 
should  be  paid.     The  court   said     "  The  transaction  is,  in  legal 
effect,  what  it  would  have  been  if  the  maker,  who  purchased  the 
cars,  had  given  a  mortgage  back  to  the  payee,  securing  the  notes, 
on  the  property  until  they  were  all  fully  paid.     The  agreement, 
Dy  which  the  vendor  retains  the  title  and  by  which  the  notes  are 
secured  on  the  cars,  is  collateral  to  the  notes,  and  does  not  affect 
their  negotiability.     It  does  not  qualify  the  promise  to  pay  at 
the  time  fixed,  any  more  than  would  be  done  by  an  agreement  of 
the  same  kind,  embodied  in  a  separate  instrument  in  the  form  of 
a  mortgage."     So,  in  Mott  v.  Havana  Nat.  Bank,  22  Hun,  354,  a 
like  ruling  was  made  with  respect  to  a  provision  in  a  note  that 
it  was  to  be  "  in  part  payment  for  a  portable  engine,  which  engine* 
shall  be  and  remain  the  property  of  the  owner  of  this  note  until 
the  amount  hereby  secured  is  paid."     So,  where  there  was  a  simi- 
lar recital  as  to  the  title  of  a  piano,  for  the  price  of  which  the 
note  was  given.     Third  Nat.  Bank  v.  Bowman,  50  App.  Div.   (N. 
Y.)    66.     And  so,  where  there  was  a  recital  in  the  note  that  it 
was  "  given  in  consideration  of  a  certain  patent  right."     Hereth 
v.  Meyer,  33  Ind.  511.    Again,  it  has  been  held  that  the  words  "  as 
per  terms  of  contract  ' '  written  after  the  words  ' '  value  received  ' 
on  the  fact  of  a  promissory  note  by  the  maker  before  its  delivery, 
do  not  destroy  the  negotiability  of  the  note  or  make  its  payment 
to  a  holder  in  due  course  conditional  upon  the  performance  of  the 
contract  intended  to  be  referred  to  by  the  maker.    National  Bank 
of  Newbury  v.  Wentworth,  218  Mass.  30.     So,  in  a  late  case  in 
New  York,  it  was  held  that  a  note  in  the  following  form  was  nego- 
tiable:   "  I  shall  pay  to  the  order  of  the  American  Hoist  &  Der- 
rick Co.,  on  the  30th  day  of  August,  1911,  in  the  city  of  New 
York,  the  sum  of  two  thousand  three  hundred  and  forty  ($2,340) 
dollars  currency,  for  amount  if  the  second  installment  agreed  on 
of  a  crane  of  their  manufacture  purchased  on  this  date,  according 
to  the  specifications  of  their  representative  Mr.  H.  S.  Johannsen." 
Merchants'  Bank  v.  Santa  Maria  Sugar  Co.,  162  App.  Div.  248. 
So,  where  a  check  contained  the  words  "This  check  may  not  be 
paid  unless  object  for  which  drawn  is  stated,"  and  the  further 
words  "For  Wilkes,"  it  was  held  that  these  words  did  not  de- 
stroy its  negotiable  character.     Brown  v.  Cow  Creek  Sheep  Co., 
21  Wyo.  1.     See  also  Equitable  Trust  Co.  v.  Taylor,  146  App. 
Div.  424;  Bright  v.  Offield,  81  Wash.  442;   Hanna  v.  McGrory, 
141  Pac.  Rep.  (N.  Mex.)  996.    But  where  the  recitals  in  the  note 


FORM  AND  INTERPRETATION.  19 

make  it  dependent  upon  the  terms  of  a  contract  referred  to 
therein  it  is  non-negotiable.  Pope  v.  Lumber  Co.,  162  N.  C.  206. 
See  also  Kimpton  v.  Studebaker,  14  Idaho,  552. 

Payment  out  of  a  particular  fund. — An  order  on  a  savings  bank, 
"  Pay  C,  or  order,  three  hundred  dollars,  or  what  may  be  due 
on  my  deposit  book  No.  E,  page  632,"  is  payable  out  of  a  par- 
ticular fund,  and  therefore  not  negotiable  under  the  statute.  Na- 
tional Savings  Bank  v.  Cable,  73  Conn.  568.  See  also,  Lowery  v. 
Steward,  25  N.  Y.  239;  Munger  v.  Shannon,  61  N.  Y.  251:  Parker 
v.  City  of  Syracuse,  31  N.  Y.  376;  Morton  v.  Naylor,  1  Hill,  583; 
Gawken  v.  De  Loraine,  3  Wils.  207.  In  the  New  York  case  first 
cited  the  order  was:  "Please  pay  to  the  order  of  Archibald  H. 
Lowery  the  sum  of  $500  on  account  of  twenty-four  bales  of  cotton 
shipped  to  you  as  per  bill  of  lading,  by  steamer  Colorado,  inclosed 
to  you  in  letter."  It  was  held  that  this  was  not  a  bill  of  ex- 
change, requiring  acceptance  to  bind  the  drawers,  but  a  specific 
draft  or  order  upon  a  particular  fund.  The  language  of  the 
statute  payable  "out  of  a  particular  fund"  is  the  equivalent  of 
the  expression  found  in  many  of  the  cases  "drawn  on  the  general 
credit  of  the  drawer."  Hibbs  v.  Brown,  190  N.  Y.  167,  175.  A 
clause  in  the  trust  securing  payment  of  an  issue  of  bonds  pro- 
vided that,  "No  present  or  future  shareholder,  officer,  manager  or 
trustee  of  the  Express  Company  shall  be  personally  liable  as  part- 
ner or  otherwise  in  respect  to  this  bond  or  the  coupons  appertain- 
ing thereto,  but  the  same  shall  be  payable  solely  out  of  the  assets 
assigned  and  transferred  to  the  said  Express  Company  or  out  of 
other  assets  of  the  Express  Company:" — Held,  that  while  a  joint 
stock  association  differs  from  a  corporation  and  is  like  a  partner- 
ship in  respect  to  the  individual  liability  of  its  members,  the  asso- 
ciation issuing  the  bonds  must  be  regarded  as  a  joint,  quasi  cor- 
porate entity;  that  the  bonds  having  been  issued  in  its  name,  upon 
its  general  credit  and  binding  all  its  assets,  complied  with  the 
requirements  for  a  negotiable  instrument,  even  though  the  prac- 
tically unimportant  individual  liability  of  members  was  excluded; 
that  such  exclusion  did  not  constitute  the  general  assets,  out  of 
which  the  bonds  were  payable,  a  particular  fund  within  the  mean- 
ing of  this  section.     Id. 

§  4.  Determinable  future  time — What  constitutes.— 
An  instrument  is  payable  at  a  determinable  future 


UU  THE   NEGOTIABLE  INSTRUMENTS   LAW. 

time,  within  the  meaning  of  this  act,  which  is  expressed 
to  be  payable: 

1.  At  a  fixed  period  after  date  or  sight;  or 

2.  On  or  before  a  fixed  or  determinable  future  time 
specified  therein;  or 

3.  On  or  at  a  fixed  period  after  the  occurrence  of  a 
specified  event,  which  is  certain  to  happen,  though  the 
time  of  happening  be  uncertain. 

An  instrument  payable  upon  a  contingency  is  not 
negotiable,  and  the  happening  of  the  event  does  not 
cure  the  defect. 

Variant  reading. — In  Wisconsin  the  following  is  interpolated 
before  the  last  sentence:  "4.  At  a  fixed  period  after  date  or  sight 
though  payable  before  then  on  a  contingency." 

Mode  of  Indicating  Maturity. — The  time  of  maturity  may  be 
indicated  in  any  way  that  shows  the  intent.  Thus  a  draft  was 
drawn  as  follows:  "  Mr.  Wm.  Tebo.  Will  please  pay  to  R.  J. 
Torpey  or  order  two  hundred  and  fifty  dollars  and  charge  to  my 
account.  Due  Oct.  1.  John  Ryan : ' ' — Held,  that  the  words  ' '  due 
Oct.  1,"  were  to  be  construed  as  payable  October  1,  and  hence 
that  the  instrument  was  negotiable.  Torpey  v .  Tebo.  184 
Mass.  307. 

Instrument  payable  on  or  before  a  specified  date. — In  such  a 
case  the  legal  rights  of  a  holder  are  clear  and  certain;  the  note  is 
due  at  a  time  fixed,  and  it  is  not  due  before.  The  option  of  the 
maker,  if  exercised,  would  be  a  payment  in  advance  of  the  legal 
liability  to  pay,  and  nothing  more.  See  Mattison  v.  Marks,  31 
Mich.  421;  Smith  v.  Ellis,  29  Me.  422;  Buchanan  v.  Wren  (Tex.), 
30  S.  W.  Rep.  1077;  Riker  v.  Sprague  Mfg.  Co.,  14  R.  I.  402;  Kis- 
kadden  v.  Allen,  7  Colorado  206 ;  Jordan  v.  Tate,  19  Ohio  St.  580 ; 
Albertson  v.  Laughlin,  173  Pa.  St.  525.  Thus,  where  the  note  was 
made  payable  twelve  months  after  date,  or  before,  if  the  money 
was  made  out  of  the  sale  of  a  machine,  it  was  held  to  be  nego- 
tiable. Ernst  v.  Steckman,  74  Pa.  St.  13.  So,  in  Ackley  School 
District  v.  Hall,  113  U.  S.  135,  140,  it  was  held  that  municipal 
bonds,  issued  under  a  statute  providing  that  they  should  be  pay- 


FORM   AND  INTERPRETATION.  21 

able  at  the  pleasure  of  the  district  at  any  time  before  due,  were 
negotiable.  The  court  said:  "  By  their  terms,  tliey  were  pay- 
able at  a  time  which  must  certainly  arrive;  the  holder  could  not 
exact  pa)  ment  before  the  day  fixed  in  the  bonds ;  the  debtor  in- 
curred no  legal  liability  for  nonpayment  until  that  day  passed."' 
So,  where  a  promissory  note  is  secured  by  a  mortgage  the  reser- 
vation in  the  mortgage  of  an  option  to  the  mortgagor  to  pay 
a  part  of  the  amount  due  at  any  time  he  may  elect  before' 
maturity,  does  not  destroy  the  negotiability  of  the  note.  Fisher 
v.  O'Hanlon,  93  Neb.  529.  So,  a  provision  in  a  note  that  it  shall 
become  due  at  the  option  of  the  holder  in  case  of  nonpayment 
of  taxes  and  assessments  on  property  mortgaged  to  secure  the 
note,  does  not  render  the  note  non-negotiable,  when  considered 
only  with  reference  to  the  time  of  payment,  and  without  regard 
to  the  amount  thereof.  Bright  v.  Offield,  81  Wash.  442.  Des 
Moines  Sav.  Bank  v.  Arthur,  163  Iowa  205.  But  compare  Holi- 
day State  Bank  v.  Hoffman,  85  Kans.  71;  Hibernia  Bank  &  Trust 
Co.  v.  Dresser,  132  La.  532.  For  a  case  applying  the  Wisconsin 
statute,  see  Thorpe  v.  Mindeman,  123  Wis.  149. 

Event  which  is  certain  to  happen. — Thus,  a  note  payable  a  cer- 
tain number  of  days  after  the  death  of  the  maker,  or  upon  demand 
after  the  death  of  the  maker,  is  a  good  promissory  note,  because 
the  event  is  sure  to  happen.  Carnwright  v.  Gray,  127  N.  Y.  92; 
Hegeman  v.  Moon,  131  N.  Y.  462;  Gilbert  v.  Adams,  146  App.  Div. 
(N.  Y.)  864.  See,  also,  Shaw  v.  Camp,  160  111.  425;  Martin  v. 
Stone,  67  N.  H.  367;  Price  v.  Jones,  105  Ind.  544;  Bristol  v.  War- 
ner, 19  Conn.  74.  So,  a  note  payable  at  a  specified  time  after  the 
death  of  a  life  tenant.  McClenathan  v.  Davis,  149  111.  App.  654. 
But  an  instrument  payable  when,  or  in  so  many  days  after,  "A 
shall  become  of  age,"  would  not  be  negotiable,  because  it  is  un- 
certain whether  A  will  live  so  long.  Goss  v.  Nelson,  1  Burr,  226; 
Rice  v.  Rice,  43  App.  Div.  (N.  Y.)  458.  So,  a  note  payable 
"  when  A  shall  marry,"  Peason  v.  Garrett,  4  Med.  242;  or  when 
a  certain  ship  shall  arrive.  Coolidge  v.  Ruggles,  15  Mass.  387; 
Grant  v.  Wood,  12  Gray,  220. 

Stipulation  for  extension. — As  to  whether  the  negotiable  char- 
acter of  the  paper  is  destroyed  by  a  stipulation  to  the  effect  that 
the  indorsers  consent  that  the  time  of  payment  may  be  extended, 
the  courts  are  not  agreed.  On  the  one  hand,  it  is  held  that  such 
a   stipulation   makes   the   time   of   payment   uncertain.     RoseviJle 


22  THE   NEGOTIABLE  INSTRUMENTS   LAW. 

State  Bank  v.  Heslet,  84  Kans.  315;  Union  Stock  Yards  Nat. 
Bank  v.  Bolan,  14  Idaho,  87.  On  the  other  hand,  it  is  held  that 
as  such  a  stipulation  neither  confers  upon  the  maker  the  right 
to  demand  an  extension,  nor  imposes  upon  the  payee  or  indorsee 
any  duty  to  grant  one,  it  cannot  have  such  effect.  Longmont  Nat. 
Bank  v.  Lonkonen,  53  Colo.  489;  Farmer  v.  Bank  of  Greattinger, 
]30  Iowa,  469;  De  Groat  v.  Focht,  37  Okla.  267;  First  Nat.  Bank 
of  Pomeroy  v.  Buttery,  17  N.  D.  326;  Stitzel  v.  Miller,  157  111. 
App.  390. 

Stipulation  for  confession  of  judgment. — Where  a  note  con- 
tains a  provision  to  the  effect  that  the  holder  may  enter  judgment 
thereon  at  any  time  whether  due  or  not,  it  is  non-negotiable, 
since  the  time  of  payment  may  depend  upon  the  whim  or  caprice 
of  the  holder,  and  is  wholly  uncertain.  First  Nat.  Bank  of  Elgin 
v.  Russell,  124  Tenn.  618;  Wisconsin  Yearly  Meeting  v.  Babler, 
115  Wis.  289. 

Instrument  payable  upon  a  contingency. — A  draft  addressed  to 
a  fire  insurance  company  and  drawn  by  its  special  agent  required 
a  trust  company  to  pay  the  amount  thereof  to  the  order  of  the 
payee  "  upon  acceptance :"  Held,  that  the  words  "  upon  accept- 
ance "  imposed  a  condition  which  rendered  the  draft  non-nego- 
liable.  Berenson  v.  London,  etc.,  Ins.  Co.,  201  Mass.  172.  See  also, 
Hibernia  Bank  &  Trust  Co.  v.  Dresser,  132  La.  532;  Tisdale  Lum- 
ber Co.  v.  Piquet,  153  App.  Div.  (N.  Y.)  266. 

Happening  of  contingency. — Thus,  where  an  instrument  is  made 
payable  when  a  certain  person  shall  become  of  age,  the  fact  that 
he  actually  attains  his  majority  does  not  make  the  instrument 
negotiable.     Goss  v.  Nelson,  1  Burr,  226. 

§  5.  Provisions  which  do  not  impair  negotiability. 
— An  instrument  which  contains  an  order  or  promise 
to  do  any  act  in  addition  to  the  payment  of  money 
is  not  negotiable.  But  the  negotiable  character  of  an 
instrument  otherwise  negotiable  is  not  affected  by  a 
provision  which: 

1.  Authorizes  the  sale  of  collateral  securities  in  case 
the  instrument  be  not  paid  at  maturity;  or 


FORM   AND  INTERPRETATION.  23 

2.  Authorizes  a  confession  of  judgment  if  the  instru- 
ment be  not  paid  at  maturity;  or 

3.  Waives  the  benefit  of  any  law  intended  for  the 
advantage  or  protection  of  the  obligor;  or 

4.  Gives  the  holder  an  election  to  require  something 
to  be  done  in  lieu  of  payment  of  money. 

But  nothing  in  this  section  shall  validate  any  pro- 
vision or  stipulation  otherwise  illegal. 

Variant  readings. — In  Illinois  the  words  "  if  the  instrument  be 
not  paid  at  maturity,"  in  subdivision  two,  are  omitted.  In  Ken- 
tucky subdivision  three  is  omitted.  In  Illinois  and  Wisconsin  the 
words  "  or  authorize  the  waiver  of  exemptions  from  execution," 
are  added  at  the  end  of  the  section. 

Mortgage  notes. — Notes  secured  by  mortgage  are  often  non- 
negotiable  because  they  incorporate  by  reference  provisions  of  the 
mortgage  requiring  something  to  be  done  in  addition  to  the  pay- 
ment of  money.  Thus,  a  provision  in  the  note  that  if  the  maker 
shall  do  any  act  whereby  the  value  of  the  mortgaged  property 
shall  be  impaired,  the  whole  amount  shall  become  due  and  pay- 
able and  the  mortgagee  may  proceed  to  collect  the  debt  and  fore- 
close the  mortgage,  destroys  the  negotiability  of  the  note,  since 
it  is  in  effect  an  undertaking  to  prevent  the  doing  of  certain 
things  in  addition  to  the  payment  of  money,  and  the  provision 
being  similar  to  a  condition  authorizing  the  holder  to  declare  the 
note  due  at  any  time  he  may  deem  the  debt  unsecured.  Bright 
v.  Offield,  81  Wash.  443.  But  a  provision  in  the  mortgage  that 
the  mortgagor  shall  pay  the  taxes  assessed  against  the  note  and 
mortgage  does  not  affect  the  negotiable  character  of  the  note. 
Page  v.  Ford,  85  Oregon,  450. 

Collateral  notes. — Notes  of  this  sort  are  often  non-negotiable 
because  of  some  provisions  therein  in  regard  to  the  time  of  pay- 
ment, or  because  of  provisions  requiring  something  to  be  done 
in  addition  to  the  payment  of  money.  But  a  statement  that  col- 
lateral security  has  been  deposited  for  the  performance  of  the 
promiSe  contained  in  the  note  is  a  recital  only  which  does  not 
affect  its  negotiability.  Wise  v.  Charlton,  4  A.  &  E.  486;  Fan- 
court  v.  Thome,  9  Q.  B.  312.     And  a  provision  merely  authorizing 


24  THE   NEGOTIABLE   INSTRUMENTS   LAW. 

the  sale  of  the  collateral,  if  the  note  be  dishonored,  does  not  have 
this  effect.  Perry  v.  Bigelow,  128  Mass.  129;  Towne  v.  Rice,  122 
Mass.  67;  Biegler  v.  Merchants'  Loan  &  Trust  Co.,  62  111.  App. 
560;  Arnold  v.  Rock  River  Valley  Union  R.  R.  Co.,  5  Duer,  207. 
So,  a  stipulation  in  a  note  payable  on  demand,  giving  the  bank 
power  to  sell  the  collateral  before  the  maturity  of  the  note,  in  the 
event  of  the  securities  depreciating  in  value,  does  not  qualify  the 
effect  of  the  promise  to  pay  ' '  on  demand. ' '  Brinden  v.  Muskegon 
Savings  Bank,  140  N.  W.  Rep.  (Mich.)  549.  A  statement,  how- 
ever, that  the  note  is  "given  as  collateral  security  with  agree- 
ment" destroys  its  negotiable  character.  Costello  v.  Crowell,  127 
Mass.  293. 

Provision  for  deposit  of  additional  collateral.— As  to  the  effect 
of  the  usual  provision,  that  in  case  of  a  depreciation  in  the  value 
of  the  securities,  the  maker  shall  deposit  additional  securities, 
and  that  in  default  of  such  deposit,  the  principal  sum  shall  become 
due  and  payable,  the  courts  are  not  agreed.  In  Kansas  and  Loui- 
sana  it  has  been  held  that  such  a  stipulation  destroys  the  negotia- 
ble character  of  the  instrument.  Holiday  State  Bank  v.  Hoffman,. 
85  Kans.  71;  Hibernia  Bank  &  Trust  Co.  v.  Dresser,  132  La.  532. 
But  the  Court  of  Appeals  of  Kentucky  in  a  late  case  held  the 
contrary.  Finley  v.  Smith,  165  Ky.  445.  In  this  case  the  court 
said:  "It  is  quite  usual  to  pledge  collateral  as  security  for  the 
payment  of  a  negotiable  note,  and  we  do  not  think  that  any  nar- 
row construction  of  the  law  should  be  adopted  that  would  have  the 
effect  of  impairing  the  value  of  this  kind  of  security  or  that  would 
deny  to  the  holder  the  right  to  insist  that  if  the  value  of  the  col- 
lateral deposited  should  become  impaired  the  maker  must 
strengthen  it  or  else  precipitate  the  maturity  of  the  paper.  This 
condition  in  the  note  is  merely  supplementary  to  the  fixed  and  con- 
trolling promises,  and  is  really  nothing  more  than  additional  se- 
curity for  the  payment  of  the  instrument.  It  is  not,  strictly  speak- 
ing, '  an  order  or  promise  to  do  an  act  in  addition  to  the  payment 
of  money,'  but  is  rather  an  order  or  promise  to  do  an  act  that  will 
better  secure  the  promise  to  pay  the  money  stipulated  at  the  time 
fixed  in  the  note.  If  this  condition  or  promise  would  disturb  the 
negotiability  of  commercial  paper,  the  effect  would  necessarily  be 
to  lessen  the  value"  of  collateral  as  security,  because  holders  of  pa- 
per would  not  be  disposed  to  accept  collateral,  much  of  which  has 
a  fluctuating  value,  if  they  were  denied  the  right  to  insist  that  its 


FORM   AND  INTERPRETATION.  25 

value  should  be  maintained  in  an  amount  sufficient  to  serve  the  pur- 
pose for  which  it  was  accepted."  In  Kennedy  v.  Broderick,  216 
Fed.  Rep.  137;  132  C.  C.  A.  381,  the  defendant  executed  a  note 
containing  over  his  signature  an  absolute  promise  to  pay  a  specific 
sum  90  days  after  date  at  a  specific  bank  waiving  demand,  protest 
and  notice  of  nonpayment,  and  declaring  that  certain  securities  de- 
livered to  the  payee  had  been  pledged  as  collateral  security.  At 
the  left  of  the  signature  was  a  provision  that  the  collateral  was  of 
the  market  value  of  $5,500;  that  if  the  collateral  depreciated,  the 
payee  might  demand  additional  security  or  mature  the  note  at 
once,  and  that  any  assignment  of  the  note  should  carry  all  the 
rights  to  the  collateral  and  that  the  payee  or  assignee  might  sell 
the  collateral  at  public  or  private  sale:  Held,  that  such  provision 
seemed  to  be  a  separate  contract  of  pledge,  and  though  written  on 
the  note,  did  not  detract  from  its  negotiability. 

Collateral  note  —  Rights  of  indorsee. —  A  collateral  note  con- 
tained a  provision  as  follows:  "Having  deposited  herewith  as 
collateral  security  for  payment  of  this  or  any  other  liability  or 

liabilities  of  to  the  holder  hereof  now  due  or  to  become 

due:"  Held,  that  the  security  might  be  applied  to  the  payment 
of  an  indebtedness  due  from  the  maker  to  an  indorsee.  Oleon  v. 
Rosenbloom,  247  Pa.  St.  250.  The  court  said:  "The  term  'holder' 
as  applied  to  negotiable  paper,  has  always  had  the  well-recognized 
legal  meaning  of  the  payee  or  indorsee  of  it,  entitled  to  receive 
the  sum  for  which  it  calls.  With  us  the  term  is  now  statutory 
and  it  means  the  payee  or  indorsee  of  a  bill  or  note,  who  is  in 
possession  of  it,  or  the  bearer  thereof.  The  covenant  which  made 
available  the  property  pledged,  as  security  for  liabilities  of  the 
maker  to  any  person  who  might  become  a  holder  for  value  before 
maturity  of  the  notes,  may  have  tended  to  facilitate  the  nego- 
tiation of  the  paper  and  the  plaintiffs  had  the  advantage  of  that 
fact."    Id. 

Judgment  notes. — Subdivision  two  was  inserted  in  the  act  to 
meet  the  requirements  in  some  of  the  states  where  judgment  notes 
are  in  use.  Such  notes  are  not  known  in  New  York.  In  Penn- 
sylvania it  was  held  that  the  warrant  of  attorney  rendered  the 
note  non-negotiable.  Overton  v.  Tyler,  3  Pa.  St.  346;  Sweeney 
v.  Thickstum,  77  Pa.  St.  131.  A  note  which  authorizes  a  confes- 
sion of  judgment  at  any  time  after  its  date,  whether  due  or  not, 
id  not  negotiable  under  the  statute;  for  as  the  time  of  payment 


2G  THE   NEGOTIABLE  INSTRUMENTS  LAW. 

will  thus  depend  upon  the  whim  or  caprice  of  the  holder,  it  is 
absolutely  uncertain.  Wisconsin  Yearly  Meeting  of  Freewill 
Baptists  v.  Babler,  115  Wis.  289;  First  Nat.  Bank  of  Elgin  v. 
Russell,  124  Tenn.  618. 

Waiver  of  Exemptions. — In  some  of  the  states  it  is  a  common 
practice  to  insert  in  promissory  notes  a  waiver  of  the  benefits  of 
homestead  and  exemption  laws,  and  this  provision  of  the  act  is 
designed  to  meet  such  cases.  See  Zimmerman  v.  Anderson,  67 
Pa.  St.  421;  Zimmerman  v.  Rote,  75  Pa.  St.  188. 

Holder's  right  of  election. — An  illustration  of  this  case  is  the 
right  of  the  holder  to  elect  to  take  stock  of  a  corporation  in  lieu 
of  payment  in  money.  Hodges  v.  Shuler,  22  N.  Y.  114.  As  the 
obligation  of  the  maker  is  to  pay  in  money,  and  as  the  payment 
in  stock  is  not  optional  with  him,  the  note  is  not  within  the  rule 
that  a  negotiable  instrument  must  not  be  payable  in  the  alterna- 
tive.— Id. 

Saving  clause. — The  object  of  the  last  sentence  of  this  section 
is  to  prevent  any  inference  of  an  intent  to  validate  any  agree- 
ment or  stipulation  mentioned  in  the  section,  where,  by  any  stat- 
ute or  settled  policy  of  the  state,  the  same  would  be  illegal. 

§  6.  Matters  which  do  not  affect  validity,  etc.,  of 
instrument. — The  validity  and  negotiable  character  of 
an  instrument  are  not  affected  by  the  fact  that: 

1.  It  is  not  dated;  or 

2.  Does  not  specify  the  value  given,  or  that  any 
value  has  been  given  therefor;  or 

3.  Does  not  specify  the  place  where  it  is  drawn  or 
the  place  where  it  is  payable;  or 

4.  Bears  a  seal;  or 

5.  Designates  a  particular  kind  of  current  money  in 
which  payment  is  to  be  made. 

But  nothing  in  this  section  shall  alter  or  repeal  any 
statute  requiring  in  certain  cases  the  nature  of  the 
consideration  to  be  stated  in  the  instrument. 


FORM  AND  INTERPRETATION.  27 

Variant  readings. — In  Illinois  subdivision  five  reads  as  follows: 
*'  Is  payable  in  currency  or  current  funds,  or  designates,"  etc.  The 
Illinois  statute  also  omits  the  last  sentence  of  the  section. 

Absence  of  date. — Church  v.  Stevens,  107  N.  Y.  Supp.  310.  See 
section  17,  which  provides  that  "where  the  instrument  is  not 
dated,  it  will  be  considered  to  be  dated  as  of  the  time  it  was  is- 
sued." As  between  the  immediate  parties  parol  evidence  is  ad- 
missible to  show  the  true  date  of  a  misdated  note.  Bigge  v.  Piper, 
86  Tenn.  589. 

Where  value  not  stated. — This  was  the  general  rule  at  common 
law.  Daniel  on  Negotiable  Instruments,  §  108.  But  formerly  in 
Connecticut  a  promissory  note,  not  purporting  on  its  face  to  be 
for  value  received  did  not  import  a  consideration.  Edgerton  v. 
Edgerton,  8  Conn.  6;  Bristol  v.  Warner,  19  Conn.  7. 

Presence  of  seal. — Prior  to  the  statute  the  Court  of  Appeals  of 
New  York  held  that  the  commercial  paper  of  a  corporation  did 
not  lose  the  quality  of  negotiability  by  having  attached  thereto 
the  corporate  seal.  Chase  Nat.  Bank  v.  Faurot,  149  N.  Y.  532; 
Weeks  v.  Esler,  143  N.  Y.  374.  See  also  Mackay  v. -St.  Mary's 
Church,  15  R.  I.  121.  The  same  rule  had  been  applied  to  munici- 
pal bonds  under  seal.  Bank  of  Rome  v.  Village  of  Rome,  19  N. 
Y.  20;  Mercer  County  v.  Hacket,  1  Wall.  83.  And  to  the  bonds 
of  private  corporations.  Brainard  v.  N.  Y.  &  H.  R.  R.  Co.,  25  N. 
Y.  496.  So  it  was  held  that  the  negotiability  of  a  United  States 
treasury  note  was  not  restrained  or  affected  by  the  fact  that  it 
was  under  the  treasury  seal.  Dinsmore  v.  Duncan,  57  N.  Y.  573. 
In  Mercer  County  v.  Hacket,  supra,  it  was  said  by  Justice  Grier, 
speaking  of  bonds  issued  under  seal:  "  But  there  is  nothing  im- 
moral or  contrary  to  good  policy  in  making  them  negotiable  if 
the  necessities  of  commerce  require  that  they  should  be  so.  A 
mere  technical  dogma  of  the  courts  or  the  common  law  cannot 
prohibit  the  commercial  world  from  inventing  or  issuing  any 
species  of  security  not  known  in  the  last  century."  See  also 
Mason  v.  Prick,  105  Pa.  St.  162  and  cases  cited;  Morris  Canal, 
etc.,  Co.  v.  Fisher,  9  N.  J.  Eq.  699;  National  Exchange  BanK  v. 
Sartford  P.  &  F.  R.  Co.,  8  R.  I.  375;  Jackson  v.  Myers,  43  Md. 
452 ;  Muth  v.  Dolfield,  43  Md.  466.  Contra,  Osborne  v.  Hubbard, 
20  Oregon  318.  The  rule  adopted  in  the  act  existed  by  statute 
in    the    following    states:     Colorado,    Florida,    Georgia,    Illinois, 


28  THE   NEGOTIABLE   INSTRUMENTS   LAW. 

Kansas,  Massachusetts,  Nebraska,  North  Carolina,  Ohio,  and  Ten- 
nessee. For  eases  arising  under  the  statute  see  Clarke  v.  Pierce, 
215  Mass.  552;  St.  Paul's  Episcopal  Church  v.  Fields,  81  Conn. 
070;  Bank  of  Houston  v.  Day,  145  Mo.  App.  410;  Arnd  v.  Heckert, 
108  Md.  300. 

Particular  kind  of  money. — Thus,  a  note  payable  in  gold  coin 
is  negotiable.  Chrysler  v.  Griswold,  43  N.  Y.  209.  So  is  a  note 
payable  "  in  bank  notes  current  in  the  city  of  New  York."  Keith 
v.  Jones,  9  Johns.  120.  A  note  payable  "  in  New  York  state  bills 
or  specie."  Judah  v.  Harris,  19  Johns.  144.  And  a  note  payable 
"  in  current  Florida  funds."  Williams  v.  Moseley,  2  Fla.  304. 
But  see  Wright  v.  Hart's  Admr.,  44  Pa.  St.  454,  where  it  was  held 
that  a  note  payable  "  in  current  funds  at  Pittsburgh  "  was  not 
negotiable.  See  also  Ford  v.  Mitchell,  15  Wis.  304;  Piatt  v.  The 
Sauk  County  Bank,  17  Wis.  222;  Lindsey  v.  McClelland,  18  Wis. 
481 ;  Klauber  v.  Biggerstoff ,  47  Wis.  551. 

Saving  clause. — In  a  number  of  the  states  it  is  required  that 
notes  given  in  payment  of  patent  rights  shall  have  written  on  the 
face  thereof  "  given  for  a  patent  right."  So,  there  are  statutes 
requiring  that  what  are  known  as  "  Bohemian  oats  "  notes  shall 
state  the  nature  of  the  consideration  for  which  they  were  given. 
And  so,  there  are  statutes  which  require  this  in  the  case  of  notes 
given  in  payment  for  lightning  rods  or  stallions,  or  notes  given  to 
li  peddlers."  The  last  sentence  of  the  section  is  intended  to  pre- 
vent any  repeal  of  such  statutes.  The  New  York  statutes  on  the 
subject  have  been  incorporated  into  the  act.    See  pages  256-258. 

§  7.  When  payable  on  demand. — An  instrument  is 
payable  on  demand: 

1.  Where  it  is  expressed  to  be  payable  on  demand, 
or  at  sight,  or  on  presentation;  or 

2.  In  which  no  time  for  payment  is  expressed. 
Where  an  instrument  is  issued,  accepted  or  indorsed 

when  overdue,  it  is,  as  regards  the  person  so  issuing, 
accepting  or  indorsing  it,  payable  on  demand. 

Instruments  payable  at  sight. — By  the  law  merchant  there  are 
some   distinctions   between   instruments   payable   on   demand   and 


FORM   AND  INTERPRETATION.  29 

those  payable  at  sight;  as,  for  example,  in  the  matter  of  days  of 
grace.  See  Daniel  on  Negotiable  Instruments,  §§  617-619,  and  au- 
thorities there  cited.  This  was  also  the  effect  of  former  statutes 
in  some  of  the  states.  Walsh  v.  Dart,  12  Wis.  635.  The  new- 
statute  abolishes  all  these  distinctions. 

Where  no  time  expressed. — As  to  instruments  in  which  no  time 
of  payment  is  expressed  the  Act  makes  no  change  in  the  law. 
See  Messmore  v.  Morrison,  172  Pa.  St.  300;  Hall  v.  Toby,  110 
Pa.  St.  318;  James  v.  Brown,  11  Ohio  St.  601;  Holmes  v.  West,  17 
Cal.  623;  Porter  v.  Porter,  51  Me.  376;  Keyes  v.  Fcustomaher,  24 
Cal.  329;  Bank  v.  Price,  52  Iowa  530;  Libby  v.  Mekelborg,  28 
Minn.  38;  Roberts  v.  Snow,  28  Neb.  425;  Bacon  v.  Page,  1  Conn. 
405;  Raymond  v.  Sellick,  10  Conn.  485;  Dodd  v.  Denny,  6  Oregon 
156.  And  the  legal  intendment  that  the  instrument  is  payable  on 
demand  cannot  be  changed  by  parol  proof.  Roberts  v.  Snow,  28 
Neb.  425;  Thompson  v.  Ketcham,  8  Johns.  146;  Sheldon  v.  Heaton, 
88  Hun,  535;  Gaylord  v.  Van  Loan,  15  Wen.  308;  McLeod  v.  Hun- 
ter, 29  Misc.  N.  Y.  558  (a  case  arising  under  the  statute) ;  Koehn- 
ing  v.  Muemminghoff,  61  Mo.  403;  Self  v.  King,  28  Tex.  552. 
The  words  "  on  demand"  may  be  added  without  avoiding  tne 
instrument.     Byles  on  Bills,  210. 

Overdue  paper. — This  rule  was  well  established  by  numerous 
decisions.  See  Berry  v.  Robinson,  9  Johns.  121;  Leavitt  v.  Put- 
nam, 1  Sandf.  199;  Bassonhorst  v.  Wilby,  45  Ohio  St.  336;  Light 
v.  Kingsbury,  50  Mo.  331;  Smith  v.  Caro,  9  Oregon  280;  Bemis  v. 
McKenzie,  13  Fla.  553.  It  is  commonly  said  that  the  indorse- 
ment of  a  bill  or  note  which  is  overdue  is  equivalent  to  drawing 
a  new  instrument  payable  at  sight.  Bishop  v.  Dexter,  2  Conn. 
419;  Mudd  v.  Harper,  1  Md.  110.  In  such  cases  presentment  for 
payment  must  be  made  and  notice  of  dishonor  given,  as  in  other 
instances  of  instruments  payable  on  demand.  Berry  v.  Robin- 
son, 9  Johns.  121;  Van  Hoosen  v.  Van  Alstyne,  9  Wend.  79; 
Poole  v.  Tolleson,  1  McCord,  200;  Patterson  v.  Todd,  18  Pa.  St. 
420 ;  Rosson  v.  Carroll,  90  Tenn.  90 ;  Brown  v.  Hull,  33  Gratt.  23. 
Where  a  note,  negotiated  before  due,  is  further  negotiated  after  it 
has  been  dishonored,  the  holder  takes  the  legal  title,  and  can 
maintain  a  suit  upon  it  in  his  own  name,  in  the  same  manner  as 
if  he  had  received  it  before  it  was  due.  French  v.  Jarvis,  29 
Conn.  353. 


30  THE   NEGOTIABLE  INSTRUMENTS  LAW. 

§  8.  When  payable  to  order. — The  instrument  is 
payable  to  order  where  it  is  drawn  payable  to  the 
order  of  a  specified  person  or  to  him  or  his  order.  It 
may  be  drawn  payable  to  the  order  of: 

1.  A  payee  who  is  not  maker,  drawer  or  drawee;  or 

2.  The  drawer  or  maker;  or 

3.  The  drawee;  or 

4.  Two  or  more  payees  jointly;  or 

5.  One  or  some  of  several  payees;  or 

6.  The  holder  of  an  office  for  the  time  being. 
Where  the  instrument  is  payable  to  order  the  payee 

must  be  named  or  otherwise  indicated  therein  with 
reasonable  certainty. 

Variant  readings. — In  Illinois  after  subdivision  six  a  provision 
is  inserted  as  follows:  7.  "An  instrument  payable  to  the  estate 
of  a  deceased  person  shall  be  deemed  payable  to  the  order  of  the 
administrator  or  executor  of  his  estate." 

Paper   payable   to   particular   person   without   more. — By   the 

rules  of  the  law  merchant  an  instrument  payable  to  a  specified 
person  without  the  addition  of  the  word  "  order,"  or  other  word 
of  similar  import,  was  not  negotiable.  Byles  on  Bills,  p.  83; 
Smith  v.  Kendall  6  T.  E.  123;  Maule  v.  Crawford,  14  Hun,  193; 
Carnwright  v.  Gray,  127  N.  Y.  92.  The  English  Bills  of  Exchange 
Act  provides  that  "  a  bill  is  payable  to  order  which  is  expressed 
to  be  so  payable,  or  which  is  expressed  to  be  payable  to  a  par- 
ticular person,  and  does  not  contain  words  prohibiting  transfer 
or  indicating  an  intention  that  it  should  not  be  transferable. ' '  But 
this  change  in  the  law  was  not  deemed  advantageous,  and  was 
not  adopted. 

Note  payable  to  the  order  of  the  maker. — Such  a  note  is  not 
complete  until  indorsed  by  the  maker.     See  section  184. 

Indorsement  in  the  alternative. — Under  the  statute  a  note  pay- 
able to  either  of  two  payees  may  be  transferred  by  the  indorse- 
ment of  either  of  them.  Union  Bank  of  Bridgewater  v.  Spies,  130 
N.  W.  Rep.  (Iowa)  928;  Vorin  v.  Schoonover,  91  Kans.  530.     So. 


FORM  AND  INTERPRETATION.  31 

a  note  indorsed  to  two  indorsees  in  the  alternative  may  be  trans- 
ferred by  the  indorsement  of  either.  Page  v.  Ford,  65  Oregon 
450.  But  it  seems  that  in  an  action  upon  a  note  payable  to  two 
persons  in  the  alternative  the  interest  is  deemed  joint,  and  both 
must  join.    Passut  v.  Heuvner,  81  Misc.  (N.  Y.)  249. 

Where  payable  to  holder  of  office. — For  example,  a  note  pay- 
able to  three  persons  as  trustees  of  an  incorporated  association, 
or  their  successors  in  office,  is  negotiable.  Davis  v.  Gore,  6  N. 
Y.  124. 

Designation  of  payee. — The  payee  need  not  be  designated  by 
name.  If  his  identity  can  be  ascertained  with  certainty,  it  is  suf- 
ficient. United  States  v.  White,  2  Hill,  59;  Blackman  v.  Lehman, 
63  Ala.  547. 

§  9.  When  payable  to  bearer. — The  instrument  is 
payable  to  bearer: 

1.  When  it  is  expressed  to  be  so  payable;  or 

2.  When  it  is  payable  to  a  person  named  therein  or 
bearer;  or  • 

3.  When  it  is  payable  to  the  order  of  a  fictitious  or 
non-existing  person,  and  such  fact  was  known  to  the 
person  making  it  so  payable;  or 

4.  When  the  name  of  the  payee  does  not  purport  to 
be  the  name  of  any  person;  or 

5.  When  the  only  or  last  indorsement  is  an  indorse- 
ment in  blank. 

Variant  readings. — In  Illinois  subdivision  three  reads  as  fol- 
lows: "  When  it  is  payable  to  the  order  of  a  person  known  by 
the  drawer  or  maker  to  be  fictitious  or  non-existent,  or  of  a  liv- 
ing person  not  intended  to  have  any  interest  in  it."  This  language 
is  quite  inaccurate.  Intended  by  whom  ?  By  the  drawer  or  maker, 
or  by  someone  else  ?  Besides,  an  indorser  as  well  as  the  maker  or 
drawer,  may  make  the  instrument  payable  to  a  fictitious  person, 
as,  for  example,  where  a  check  drawn  to  the  order  of  A  is  in- 
dorsed by  him  to  B,  whom  he  knows  to  be  fictitious.  To  such  a 
case  the  Illinois  statute  would  not  apply,  since,  by  its  terms,  it  is 
limited  to  cases  where  the  act  is  that  of  the  maker  or  drawer. 


32  THE   NEGOTIABLE  INSTRUMENTS   LAW. 

In  Illinois  subdivision  five  reads  as  follows:  "  When  although 
originally  payable  to  order,  it  is  indorsed  in  blank  by  the  payee  or 
a  subsequent  indorsee."  This  was  the  rule  at  common  law.  But 
it  is  not  suited  to  modern  conditions,  and  in  England  was  changed 
by  statute.  In  the  every-day  business  of  the  banks  it  is  very  in- 
convenient. For  example,  if  a  man  in  New  York  should  send  a 
merchant  in  Chicago,  his  check  drawn  to  the  order  of  that  mer- 
chant, and  the  latter  should  indorse  the  check  in  blank,  and  de- 
posit it  in  his  bank,  how  would  the  Chicago  bank  safely  remit 
that  check  to  New  York?  Under  the  statute  as  it  exists  in  all 
the  other  states,  the  matter  is  simple  enough;  for  the  Chicago 
bank  has  only  to  indorse  the  paper  specially  to  its  correspondent, 
and  then  the  "last"  indorsement  not  being  in  blank,  the  paper 
is  no  longer  payable  to  bearer.  But  under  the  Illinois  statute  the 
check  must  continue  to  be  payable  to  bearer  merely  because  the 
payee  has  indorsed  in  blank.    See  note  to  section  40. 

Fictitious  payee — Knowledge  of  maker. — Before  the  adoption 
of  the  statute  it  was  well  settled  that  an  instrument  drawn  to  the 
order  of  a  fictitious  person  was  not  to  be  deemed  payable  to 
bearer,  unless  the  fictitious  character  of  the  payee  was  known  to 
the  person  making  the  instrument  so  payable.  As  said  by  the 
Court  of  Appeals  of  New  York,  in  Shipman  v.  Bank  of  the  State 
of  New  York,  126  N.  Y.  318,  "  The  maker's  intention  is  the  con- 
trolling consideration  which  determines  the  character  of  such 
paper.  It  cannot  be  treated  as  payable  to  bearer  unless  the  maser 
knows  the  payee  to  be  fictitious,  and  actually  intends  to  make  the 
paper  payable  to  a  fictitious  person."  Hence,  if  the  maker  or 
drawer  supposes  the  payee  to  be  an  actually  existing  person  (as, 
for  instance,  where  he  is  induced  by  fraud  to  draw  the  instrument 
to  the  order  of  a  fictitious  person  whom  he  supposes  to  exist),  the 
instrument  will  not  be  payable  to  bearer,  and  no  person  can  ac- 
quire the  title  thereto  by  delivery.  And  where  the  instrument  is 
drawn  payable  at  a  bank,  the  bank  cannot  charge  the  same  to  the 
account  of  its  customer,  since  the  instrument  is  not  in  such  case 
payable  to  bearer,  and  the  indorsement  is  a  forgery.  Shipman  v. 
Bank  of  the  State  of  New  York,  supra;  Armstrong  v.  Bank,  46 
Ohio  St.  412;  Bank  of  England  v.  Vagliano  [1891],  App.  Cas. 
107.    But  see  Clutton  v.  Attenborough  [1895],  2  Q.  B.  707. 

Same  Subject — Effect  of  the  statute. — Under  the  statute,  as  for- 
merly, it  is  only  when  the  person  making  the  instrument  knew 


FORM  AND  INTERPRETATION.  33 

that  lie  was  making  it  payable  to  a  fictitious  or  nonexisting  per- 
son and  it  can  be  treated  as  payable  to  bearer.  Boles  v.  Harding, 
201  Mass.  103;  Seaboard  Nat.  Bank  v.  Bank  of  America,  193  N. 
Y.  26.  Hence,  where  a  draft  procured  by  the  fraudulent  act  of 
an  employee  of  a  firm  was  made  payable  to  an  existing  partner- 
ship and  delivered  to  such  employee,  who  then  forged  the  indorse- 
ment of  the  partnership  and  deposited  the  draft  to  his  own  ac- 
count in  another  bank,  it  was  held  that  the  draft  could  not  be 
treated  as  payable  to  a  fictitious  person.  Seaboard  Nat.  Bank 
v.  Bank  of  America,  supra.  And  an  instrument  is  not  to  be 
treated  as  payable  to  a  fictitious  payee  merely  because  the  drawer 
has  been  induced  to  draw  the  same  by  a  fraudulent  representation 
that  he  is  indebted  to  the  person  named  as  payee.  Jordan  Marsh 
Co.  v.  National  Shawmut  Bank,  201  Mass.  397.  Or  by  a  fraudu- 
lent representation  as  to  the  identity  of  the  payee.  Boles  v. 
Harding,  201  Mass.  103;  Hartford  v.  Greenwich  Bank,  215  N.  Y. 
726;  S.  C.  157  App.  Div.  448.  But  though  the  instrument  is  drawn 
payable  to  the  order  of  an  existing  person,  yet  if  the  person  draw- 
ing it  did  not  intend  that  it  should  be  delivered  to  the  ostensible 
payee  or  be  indorsed  by  him,  it  is  to  be  deemed  drawn  to  the 
order  of  a  fictitious  person,  and  therefore  payable  to  bearer.  Sny- 
der v.  Corn  Exchange  Nat.  Bank,  221  Pa.  599 ;  Trust  Co.  of  Amer- 
ica v.  Hamilton  Bank,  127  App.  Div.  (N.  Y.)  515.  Where  an  in- 
dorsement signed  by  the  payee  is  to  a  fictitious  person  or  "bearer" 
the  fictitious  name  may  be  stricken  out,  and  suit  may  be  main- 
tained on  the  note  without  the  indorsement  of  such  name;  and 
this  is  true  whether  the  payee  knew,  or  did  not  know,  his  indorsee 
was  a  fictitious  person.    Keenan  v.  Blue,  240  111.  177. 

Instrument  payable  to  estate  of  deceased  person.— It  has  been 
held  that  a  note  made  payable  to  the  order  of  the  estate  of  a  de- 
ceased person  is  a  promissory  note  with  a  fictitious  payee,  and  that 
where  it  has  been  negotiated  by  the  maker  it  is  deemed  as  against 
him  to  be  a  note  payable  to  bearer.  Lewisohn  v.  The  Kent  &  Stan- 
ley Co.,  87  Hun,  257.  But  the  correctness  of  this  view  seems  very 
questionable.  The  ground  of  the  rule  is  that,  as  the  fictitious 
payee  cannot  indorse  the  instrument,  the  drawer  or  maker  must 
have  intended  that  it  should  be  payable  to  bearer.  But  no  such 
intention  can  properly  be  ascribed  where  the  instrument  is  drawn 
payable  to  the  order  of  an  estate;  for  the  obvious  intention  is 
3 


34  THE  NEGOTIABLE  INSTRUMENTS  LAW. 

that  it  shall  be  paid  upon  the  order  of  the  decedent's  legal  rep« 
resentatives,  and  that  they  shall  indorse  the  paper.  Cheeks  are 
frequently  drawn  in  this  way,  and  it  appears  to  be  the  understand- 
ing of  the  business  community  that  they  require  the  indorsement 
of  the  executor  or  administrator. 

Where  name  not  that  of  a  person. — Thus,  checks  are  often  drawn 
payable  to  "  cash  "  or  to  "  sundries."  See  Willets  v.  Phoenix 
Bank,  2  Duer,  121;  Mechanics'  Bank  v.  Stratton,  2  Keyes,  365. 
And  subdivision  4  was  intended  to  cover  all  such  cases. 

Where  last  indorsement  is  blank. — Where  a  note  payable  to  the- 
maker  is  indorsed  in  blank  and  contains  no  other  indorsement  it 
is  payable  to  bearer  under  this  section.  Davis  v.  First  Nat.  Bank 
of  Blaksely,  62  So.  Rep.  (Ala.)  261;  Peoples'  Nat.  Bank  v.  Taylor,. 
149  Pac.  Rep.  (Ariz.)  763.  But  an  indorsement  in  blank  on  the 
back  of  a  non-negotiable  note  does  not  render  it  negotiable  under 
the  statute.  Johnson  v.  Lassiter,  155  N.  C.  47;  Wettlaufer  v. 
Baxter,  137  Ky.  362.  If  the  maker  of  a  promissory  note  wrong- 
fully obtains  possession  of  it  after  it  has  been  indorsed  in  blank 
by  the  payee,  he  is  the  bearer  within  the  meaning  of  the  statute* 
Massachusetts  National  Bank  v.  Snow,  187  Mass.  159. 

§  10.  What  terms  sufficient. — The  instrument  need 
not  follow  the  language  of  this  act,  bnt  any  terms  are 
sufficient  which  clearly  indicate  an  intention  to  con- 
form to  the  requirements  hereof. 

Variant  readings. — In  Alabama,  Idaho,  Iowa,  North  Carolina 
and  Wyoming,  the  word  "  negotiable  "  is  interpolated  between  the 
words  "  The  "  and  "  Instrument  "  at  the  beginning  of  the  sec- 
tion. But  as  by  section  two  the  word  "  Instrument  "  is  declared 
to  mean  "  negotiable  instrument  "  the  interpolation  is  surplus- 
age. In  Wisconsin  the  following  is  added  at  the  end  of  the  sec- 
tion: "  Memoranda  upon  the  face  or  back  of  the  instrument, 
whether  signed  or  not,  material  to  the  contract,  if  made  at  the 
time  of  the  delivery,  are  part  of  the  instrument,  and  parol  evi- 
dence is  admissible  to  show  the  circumstances  under  which  they 
were  made."  But  this  is  hardly  germane  to  the  general  scheme 
of  the  act,  which  was  confined  intentionally  to  the  substantive  law 
peculiar  to  negotiable  paper. 


FORM   AND  INTERPRETATION.  35 

Foreign  language — Mode  of  writing. — It  may  be  written  in  a 
foreign  language  as  well  as  in  English.  Debebian  v.  Gala,  64  Md. 
262,  265.  The  writing  may  be  in  pencil  as  well  as  in  ink.  Brown 
v.  Buetchers'  Bank,  6  Hill,  443.  As  to  the  construction  of  ambigu- 
ous instruments,  see  section  17. 

§  11.  Presumption  as  to  date.-^- Where  the  instru- 
ment or  an  acceptance  or  any  indorsement  thereon  is 
dated,  such  date  is  deemed  prima  facie  to  be  the  true 
date  of  the  making,  drawing,  acceptance  or  indorse- 
ment, as  the  case  may  be. 

Place  of  contract — Presumption. — A  negotiable  instrument  is 
presumed  to  have  been  made  where  it  is  dated,  and  hence  an  ac- 
tion upon  a  note  dated  in  the  city  of  New  York,  must  be  deemed 
to  be  brought  upon  a  contract  made  in  the  state  of  New  York. 
Manufacturers'  Commercial  Co.  v.  Blitz,  131  App.  Div.  (N.  Y.) 
17.  But  evidence  is  admissible,  as  between  the  immediate  parties, 
to  show  a  mistake  in  the  date.  Cowing  v.  Altman,  71  N.  Y.  441. 
If  the  date  is  an  impossible  one,  the  law  will  adopt  the  nearest 
day.  Thus,  if  the  date  is  written  September  31st,  the  true  date 
will  be  deemed  to  be  September  30th.  Wagner  v.  Kenner,  2  Rob. 
(La.)  120. 

§  12.  Ante-dated  and  post-dated. — The  instrument 
is  not  invalid  for  the  reason  only  that  it  is  ante-dated 
or  post-dated,  provided  this  is  not  done  for  an  illegal 
or  fraudulent  purpose.  The  person  to  whom  an  instru- 
ment so  dated  is  delivered  acquires  the  title  thereto 
as  of  the  date  of  delivery. 

Post-dated  instrument. — The  fact  that  a  check  is  post-dated 
does  not  make  it  non-negotiable.  Triphonoff  v.  Sweeney,  65  Ore- 
gon, 209.  And  it  may  be  negotiated  before  the  day  of  its  date. 
Brewster  v.  McCardle,  8  Wend.  478;  Pasmore  v.  North,  13  East 
517.  Nor  does  the  negotiation  of  such  a  check  before  the  day  of 
its  date  put  the  indorsee  upon  notice.  Triphonoff  v.  Sweeney, 
supra;  Albert  v.  Hoffman,  64  Misc.  (N.  Y.)  87.  The  section  con- 
templates instruments  which  are  ante-dated  or  post-dated  in  ac- 


30  THE   NEGOTIABLE   INSTRUMENTS   LAW. 

-eordance  with  a  mutual  agreement  between  the  parties.  Bank  of 
Houston  v.  Day,  145  Mo.  App.  410  Where  a  bank  pays  a  post- 
dated check  before  the  date  thereof,  and  then  dishonors  other 
■checks  because  the  payment  of  the  post-dated  check  has  left  in- 
sufficient funds  for  that  purpose,  it  is  liable  to  the  depositor  for  a 
wrongful  refusal  to  pay  his  checks.  Smith  v.  Maddox-Rucker 
Banking  Co.,  135  Ga.  151.  If  for  the  purpose  of  evading  the  law, 
a  false  date  is  inserted  in  the  instrument,  it  will  be  void  as  to  all 
persons  having  notice.     Serle  v.  Norton,  9  M.  &  W.  309. 

§  13.  When  date  may  be  inserted. — Where  an  instru- 
ment expressed  to  be  payable  at  a  fixed  period  after 
date  is  issued  undated,  or  where  the  acceptance  of  an 
instrument  payable  at  a  fixed  period  after  sight  is  un- 
dated, any  holder  may  insert  therein  the  true  date  of 
issue  or  acceptance,  and  the  instrument  shall  be  pay- 
able accordingly.  The  insertion  of  a  wrong  date  does 
not  avoid  the  instrument  in  the  hands  of  a  subsequent 
holder  in  due  course;  but  as  to  him,  the  date  so  in- 
serted is  to  be  regarded  as  the  true  date. 

Question  of  wrong  date. — Where  an  undated  note  is  issued,  and 
an  improper  date  is  inserted  therein  by  the  payee,  and  it  is  there- 
after negotiated  to  an  innocent  third  party  such  party  may  en- 
force the  same,  notwithstanding  the  improper  date.  Bank  of 
Houston  v.  Day,  145  Mo.  App.  410;  Redlich  v.  Doll,  54  N.  Y.  238; 
Page  v.  Monell,  3  Abb.  Ct.  App.  Dec.  433;  Mitchell  v.  Culver,  7 
Cow.  336.  But  the  provision  that  the  insertion  of  a  wrong  date 
does  not  avoid  the  instrument  in  the  hands  of  a  subsequent  holder 
in  due  course,  implies  that  the  insertion  of  a  wrong  date  in  an 
undated  instrument  by  one  having  knowledge  of  the  true  date  of 
issue  would  avoid  the  instrument  as  to  him.  Bank  of  Houston 
v.  Day,  supra. 

§  14.  Filling  blanks  —  rights  of  holder.— Where  the 
instrument  is  wanting  in  any  material  particular,  the 
person  in  possession  thereof  has  a  prima  facie  author- 
ity to  complete  it  by  filling  up  the  blanks  therein.  And 


FORM   AND  INTERPRETATION.  37 

a  signature  on  a  blank  paper  delivered  by  the  person 
making  the  signature  in  order  that  the  paper  may  be 
converted  into  a  negotiable  instrument  operates  as  a 
prima  facie  authority  to  fill  it  up  as  such  for  any 
amount.  In  order,  however,  that  any  such  instrument, 
when  completed,  may  be  enforced  against  any  person 
who  became  a  party  thereto  prior  to  its  completion,  it 
must  be  filled  up  strictly  in  accordance  with  the  au- 
thority given  and  within  a  reasonable  time.  But  if 
any  such  instrument,  after  completion,  is  negotiated 
to  a  holder  in  due  course,  it  is  valid  and  effectual  for  all 
purposes  in  his  hands,  and  he  may  enforce  it  as  if  it 
had  been  filled  up  strictly  in  accordance  with  the  au- 
thority given  and  within  a  reasonable  time. 

Variant  readings. — In  Illinois  the  words  "  issued  or  "  are  in- 
serted between  the  words  "  is  "  and  "  negotiated  "  near  the  be- 
ginning of  the  last  sentence.  In  Wisconsin  the  words  "  prior  to 
negotiation  "  are  inserted  between  the  words  "  it  "  and  "  by  " 
near  the  end  of  the  first  sentence ;  and  the  words  ' '  an  authority  ' ' 
are  substituted  for  "  a  prima  facie  authority  "  near  the  end  of 
the  second  sentence.  In  South  Dakota  this  section  is  struck  out, 
and  the  following  substituted  therefor:  "One  who  makes  him- 
self a  party  to  an  instrument  intended  to  be  negotiable,  but 
which  is  left  wholly  or  partly  in  blank,  for  the  purpose  of  filling 
afterwards,  is  liable  upon  the  instrument  to  an  indorsee  thereof 
in  due  course,  in  whatever  manner  and  at  whatever  time  it  may 
be  filled,  so  long  as  it  remains  negotiable  in  form." 

Authority  to  complete  the  instrument. — The  leading  authority 
upon  this  point  is  Russell  v.  Langstaffe,  2  Doug.  514.  In  that  case 
a  person  had  indorsed  his  name  on  five  copperplate  checks,  blank 
as  to  amounts,  dates  and  times  of  paj'ment,  and  the  holder,  Galley, 
filled  them  up  as  his  own  notes  with  different  dates,  amounts  and 
times  of  payment.  The  indorser  was  held  liable  to  the  plaintiff, 
who  had  discounted  them.  Lord  Mansfield  said:  "  The  indorse- 
ment on  a  blank  note  is  a  letter  of  credit  for  an  indefinite  sum. 
The  defendant  said  '  Trust  Galley  for  any  amount,  and  I  will  be 
his  security.'     It  does  not  lie  in  his  mouth  to  say  the  indorsement 


38  THE  NEGOTIABLE  INSTRUMENTS  LAW. 

was  not  regular."  See  also  Ovrick  v.  Colston,  7  Gratt.  189; 
Frank  v.  Lillienfeld,  33  Gratt.  377;  Boyd  v.  MeCann,  10  Md.  118; 
Elliott  v.  Chestnut,  30  Md.  562;  Androscoggin  Bank  v.  Kimball, 
10  Cush.  373.  If  the  place  for  the  name  of  the  payee  is  left 
blank  the  holder  may  fill  it  up  with  his  own  name  as  payee. 
Boyd  v.  MeCann,  10  Md.  118. 

What  may  be  inserted. — But  it  will  be  noticed  that  the 
authority  is  only  to  complete  the  instrument,  for  while  there  is 
an  authority  to  fill  up  blanks  in  order  to  make  the  instrument 
complete  as  such,  there  is  no  authority  to  insert  a  special  agree- 
ment not  essential  to  the  completeness  of  the  instrument.  Weyer- 
hauser  v.  Dunn,  100  N.  Y.  150.  The  authority  given  by  this  sec- 
tion to  fill  up  the  blanks  is  not  confined,  however,  to  such  mat- 
ters as  are  barely  sufficient  to  make  the  paper  a  complete  negoti- 
able instrument,  but  extends  to  such  other  matters  as  are  proper 
to,  and  are  usually  found  in,  such  instruments.  Thus,  where  a 
blank  space. was  left  after  the  word  "  at  "  in  a  printed  form  of 
promissory  note,  the  addition  of  the  words  "  Des  Moines,  Iowa," 
was  held  to  have  been  authorized.  Johnston  v.  Hoover,  139  Iowa, 
143.  So,  where  the  space  for  the  amount  of  the  attorney's  fee 
was  left  blank,  and  the  parties  contemplated  that  such  amount  as 
should  be  necessary  should  be  filled  in,  it  was  held  that  the  holder 
had  authority  to  fill  in  the "  blank  with  a  reasonable  amount. 
Schnitzer  v.  Kramer,  268  111.  603. 

Necessity  for  delivery — Intention. — It  is  to  be  noticed  that  the 
authority  to  fill  up  a  blank  paper  for  any  amount  applies  only 
where  the  paper  has  been  delivered;  and  the  delivery  must  have 
been  with  the  intention  that  the  paper  should  be  converted  into 
a  negotiable  instrument.  Iowa  State  Bank  v.  Claypool,  91  Kans. 
251.     See  next  section. 

Burden  of  proof. — Under  section  16,  the  production  of  the  in- 
strument raises  a  presumption  of  a  valid  and  intentional  delivery, 
and  under  section  14  such  delivery  operates  as  prima  facie  au- 
thority to  fill  up  the  blanks;  and  hence  the  holder  has  not  the 
burden  of  proving  that  the  instrument  was  filled  up  in  accordance 
with  the  authority  given,  but  the  party  sought  to  be  held  liable 
must  show  the  agreement  and  the  violation  of  its  terms.  Madden 
v.  Gaston,  137  App.  Div.  (N.  Y.)  294. 


FORM  AND  INTERPRETATION.  39 

Blank  space  with  figures  in  margin. — Where  the  amount  is 
stated  in  figures  in  the  margin,  and  a  blank  space  is  left  for  the 
amount  in  the  body  of  the  instrument,  it  is  not  complete  until  the 
blank  is  filled  up.  Chestnut  v.  Chestnut,  104  Va.  539;  Hallen  v. 
Davis,  59  Iowa  444;  Norwich  Bank  v.  Hyde,  13  Conn.  281; 
Schreyer  v.  Hawkes,  22  Ohio  St.  308,  315;  Garrard  v.  Lewis,  L.  R. 
10  Q.  B.  Div.  30.  But  in  such  case  the  amount  cannot  be  filled 
in  for  a  larger  sum  than  that  indicated  by  the  figures.  Norwich 
Bank  v.  Hyde,  13  Conn.  284. 

True  date  to  be  inserted. — Where  a  blank  is  left  for  the  date, 
the  date  which  the  holder  is  authorized  to  insert  is  the  true  date, 
and  where  the  holder  with  knowledge  of  the  true  date,  inserts  an 
untrue  date,  he  is  not  a  subsequent  holder  in  due  course.  Bank 
of  Houston  v.  Day,  145  Mo.  App.  410. 

Where  instrument  negotiated  prior  to  completion. — Where  A 
delivered  his  note  in  an  incomplete  condition  to  B,  and  the  latter 
transferred  it  in  the  same  condition  to  C,  and  it  was  not 
completed  in  accordance  with  authority:  Held,  that  C  was 
not  a  holder  in  due  course  and  could  not  recover.  Stone  v. 
Sargent,  220  Mass.  445;  Tower  v.  Stanley,  Id.  429.  So,  where  A 
signed  a  note  in  which  a  blank  space  was  left  for  the  name 
of  the  payee,  and  entrusted  it  to  his  co-maker  to  be  used 
in  buying  a  meat  market,  but  the  co-maker  delivered  the  note 
to  a  bank,  which  inserted  its  own  name  as  payee,  it  was  held  that 
the  note  was  not  enforcible  against  A.  Hartington  Nat.  Bank  v. 
Breslin,  88  Neb.  47.  See  also  Union  Trust  Company  v.  McCrum, 
145  App.  Div.  (N.  Y.)  409;  Mannussier  v.  Wright,  158  111.  App. 
219.  So,  where  notes  incomplete  as  to  date,  time  of  payment  and 
amount  were  left  with  a  bank,  and  were  filled  out  from  time  to 
time  by  the  cashier,  it  was  held  that  the  bank  was  not  a  holder  in 
due  course.  Hunter  v.  Allen,  127  App.  Div.  (N.  Y.)  572.  So, 
where  a  woman  delivered  to  her  husband  a  check  signed  by  her 
and  made  payable  to  a  certain  creditor,  but  with  the  amount  left 
blank,  instructing  her  husband  to  apply  it  in  payment  of  her  debt, 
and  the  husband  delivered  it  to  the  creditor  with  the  blank  un- 
filled, to  be  used  as  a  payment  upon  a  debt  of  his  own  to  the 
same  creditor,  and  allowed  the  creditor  with  his  consent  to  fill  in 
the  blank  with  a  certain  amount  as  such  payment :  Held,  that  the 
check  was  an  incomplete  instrument  under  this  section,  and  that 


40  THE   NEGOTIABLE  INSTRUMENTS  LAW. 

in  an  action  brought  by  the  creditor  against  the  woman  for  her 
indebtedness  to  him,  alleged  to  be  unpaid,  she  could  introduce  evi- 
dence to  show  that,  by  the  authority  actually  given  him,  her  hus- 
band had  no  right  to  treat  the  check  as  he  did,  or  to  apply  it 
otherwise  than  in  payment  of  her  debt.  Boston  Steel  &  Iron  Uo. 
v.  Steuer,  183  Mass.  140.  See  also  Exchange  Bank  v.  Robinson, 
185  Mo.  App.  582;  Kramer  v.  Schnitzer,  109  N.  E.  Rep.  (111.)  695. 

Blank  space  left  in  completed  instrument. — It  is  important  not 
to  confuse  two  different  classes  of  instruments,  viz. :  (1)  those  in 
which  obvious  blanks  are  left  at  the  time  when  they  are  made  or 
indorsed,  of  such  a  character  as  manifestly  to  indicate  that  they 
are  incomplete  until  such  blanks  shall  be  filled  up,  and  (2)  those 
which  are  apparently  complete,  and  which  can  be  regarded  as  con- 
taining blanks  only  because  the  written  matter  does  not  so  fully 
occupy  the  entire  paper  as  to  preclude  the  insertion  of  additional 
words  or  figures,  or  both.     The  provision  of  the  statute  obviously 
applies  only  to  instruments  of  the  first  class.     As  to  instruments 
of  the  second  class,  the  authorities  are  not  agreed  as  to  the  lia- 
bility of  a  party  issuing  or  negotiating  an  instrument  so  made  out. 
In  some  cases  it  has  been  held  that  one  who  sends  forth  a  check, 
note  or  bill  filled  out  in  such  a  manner  as  to  invite  an  alteration 
in  the  amount  may  be  held  for  the  sum  to  which  the  paper  has 
been  raised.     Garrard  v.  Hadden,  67  Pa.  St.  82;  Yocum  v.  Smith, 
63  111.  321;  Scotland  Co.  Nat.  Bank  v.  O'Connel,  23  Mo.  App.  165; 
Hacket  v.  First  Nat.  Bank  of  Louisville,  114  Ky.  193;  Isnard  v. 
Torres,  10  La.  Ann.  103;  Young  y.  Grote,  4  Bing.  253.     But  other 
courts  have  held  that  no  liability  on  the  part  of  a  party  to  the 
paper  can  be  predicated  simply  upon  the  fact  that  such  spaces 
exist   therein.    Nat.  Exchange   Bank  v.  Lester,  194  N.  Y.  461; 
Critten  v.  Chemical  Nat.  Bank,  171  N.  Y.  219 ;  Greenfield  Savings 
Bank  v.  Stowell,  123  Mass.  196;  Holmes  v.  Trumper,  22  Mich.  427; 
Knoxville  Nat.  Bank  v.  Clark,  51  Iowa  264;  Burrows  v.  Klunk, 
70  Md.  451. 

Liability  to  holder  in  due  course. — If  the  instrument  be  used, 
or  the  blanks  filled  up  contrary  to  the  agreement  or  intention  of 
the  original  parties,  the  maker  is  held  to  any  bona  fide  holder  for 
value,  upon  the  principle  that  where  one  or  two  innocent  parties 
must  suffer  by  the  fraud  or  wrong  of  a  third  person  the  one  who 
put  it  in  the  power  of  such  third  person  to  commit  the  fraud  or 


FORM   AND  INTERPRETATION.  41 

wrong  must  bear  the  loss.  The  liability  of  the  maker  in  such 
ease  has  also,  sometimes,  been  placed  upon  the  principle  of  estop- 
pel; he,  having  put  his  paper  in  circulation,  and  thus  invited  the 
public  to  receive  it  of  any  one  having  apparent  title,  is  estopped 
to  urge  the  actual  defect  of  title  against  a  bona  fide  holder.  Red- 
lich  v.  Doll,  54  N.  Y.  234,  238.  Where  one  makes  and  delivers 
a  promissory  note,  perfect  in  form,  except  that  a  blank  is  left 
after  the  word  "  at  "  for  the  place  of  payment,  there  is  an  im- 
plied authority  for  any  bona  fide  holder  to  fill  the  blank,  and  the 
insertion  of  a  place  of  payment,  and  negotiation  of  the  note,  con- 
trary to  the  agreement  of  the  original  parties,  does  not  avoid  it 
in  the  hands  of  a  bona  fide  holder  for  value.  (Id.)  So,  one  who 
intrusts  another  with  his  blank  acceptance  is  liable  to  a  holder  for 
value,  though  filled  up  for  a  sum  exceeding  that  limited  by  the 
acceptor.    Van  Duzer  v.  Howe,  21  N.  Y.  531. 

Alterations. — The  provision  of  the  statute  that  in  the  hands  of 
a  holder  in  due  course  the  instrument  is  valid  and  effectual  for  all 
purposes  applies  only  where  blanks  are  filled  up,  and  not  in  cases 
where  there  have  been  alterations.  Thus,  where  B,  for  the  accom- 
modation of  his  brother,  placed  his  indorsement  on  a  printed  form 
of  promissory  note,  which  contained  the  words  "  at  the  Second  Na- 
tional Bank  of  Wilkes-Barre,  Pa.,"  and  the  brother  besides  filling 
out  the  blanks,  struck  out  the  name  of  the  Second  National  Bank 
and  inserted  the  name  of  another  bank,  which  discounted  the  note, 
it  was  held  that,  while  the  filling  out  of  the  blanks  was  impliedly 
authorized,  the  change  of  name  of  the  bank  where  the  instrument 
was  to  be  payable  was  a  material  alteration  and  discharged  the  in- 
dorser.  First  Nat.  Bank  of  Wilkes-Barre  v.  Barnum,  160  Fed. 
Rep.  245. 

Whether  payee  may  be  holder  in  due  course. — In  Vander  Ploeg 
v.  Van  Zuuk,  135  Iowa,  350,  the  defendants  placed  their  signatures 
on  a  blank  printed  form  at  the  request  of  P,  who  was  a  partner  of 
one  of  them  in  a  mercantile  business,  on  the  representation  that  he 
might  find  it  necessary  to  raise  $150  or  $200  for  temporary  use  in 
the  business.  Afterwards  P,  being  indebted  on  his  individual  ac- 
count to  the  plaintiff,  filled  out  the  form  for  $2,000  payable  to  the 
order  of  the  plaintiff,  and  delivered  the  same  to  the  plaintiff  with- 
out authority  from  the  defendants:  Held,  that  the  plaintiff  could 
not  be  deemed  a  holder  in  due  course,  since  he  was  a  party  to  the 


42  THE  NEGOTIABLE  INSTRUMENTS  LAW. 

original  contract,  and  not  a  person  to  whom  the  paper  had  been 
negotiated.  The  court  said :  "  It  seems  to  us  under  these  defini- 
tions and  the  application  thereof  the  plaintiff  was  a  holder  of  the 
note,  but  not  a  holder  in  due  course.  The  latter  term  seems  un- 
questionably to  be  used  to  indicate  a  person  to  whom  after  com- 
pletion and  delivery  the  instrument  has  been  negotiated.  In  an 
ordinary  case  [the  payee]  is  the  person  with  whom  the  contract  is 
made,  and  his  rights  are  not  in  general  dependent  on  any  peculiari- 
ties in  the  law  of  negotiable  instruments.  The  peculiarities  of  that 
law  distinguishing  negotiable  instruments  from  other  contracts 
relate  to  a  holder  who  has  taken  by  negotiation,  and  not  as  an  origi- 
nal party."  But  the  contrary  was  held  by  the  Supreme  Court  of 
Massachusetts  in  the  late  case  of  Liberty  Trust  Co.  v.  Tilton,  217 
Mass.  462.  In  that  case  T  signed  a  note  to  the  order  of  the  plaintiff 
with  the  amount  left  blank,  and  the  defendant  indorsed  the  note 
•upon  the  representation  and  agreement  of  T  that  it  should  be  filled 
out  for  $200  and  no  more.  But  T,  in  violation  of  his  agreement, 
filled  in  the  amount  of  $400,  and  delivered  the  note  complete  in 
form  to  the  plaintiff,  the  payee,  who  took  it  in  good  faith  and  for 
value.  It  was  held  that  the  payee  under  these  circumstances  was  a 
holder  in  due  course.  Compare  Guerrant  v.  Guerrant,  7  Va.  Law 
Reg.  639.     See  also  note  to  section  52. 

§  15.  Incomplete  instrument  not  delivered. — Where 
an  incomplete  instrument  has  not  been  delivered  it 
will  not,  if  completed  and  negotiated  without  author- 
ity, be  a  valid  contract  in  the  hands  of  any  holder,  as 
against  any  person  whose  signature  was  placed  thereon 
before  delivery. 

Variant  readings. — In  Wisconsin  the  word  "  negotiation  "  is 
substituted  for  "  delivery  "  at  the  end  of  the  section. 

Necessity  for  delivery — Stolen  instrument. — A  negotiable  instru- 
ment must  be  complete  and  perfect  when  it  is  issued,  or  there  must 
be  authority  reposed  in  some  one  afterward  to  supply  any  thing 
needed  to  make  it  perfect.  Sedgwick  v.  McKim,  53  N.  Y.  307,  313 ; 
Davis  Sewing  Machine  Co.  v.  Best,  105  N.  Y.  59,  67.  And  while 
the  possession  of  such  instrument  is  prima  facie  evidence  of  de- 
livery, yet  if  it  appear  that  the  instrument  was  never  actually  de- 


FORM  AND  INTERPRETATION.  43 

livered,  there  can  be  no  recovery  upon  it,  even  when  in  the  hands 
of  an  innocent  holder.  Linick  v.  Nutting,  140  App.  Div.  (N.  Y.) 
265.  And  mere  negligence  on  the  part  of  the  person  sought  to  be 
held  liable  will  not  be  sufficient  to  entitle  the  holder  to  recover  of 
him  on  the  instrument.  Baxendale  v.  Bennett,  L.  K.  3  Q.  B.  Div. 
525.  Thus,  in  the  case  last  cited,  where  a  blank  acceptance  which 
had  been  given  to  one  person  and  returned  by  him  was  afterward 
stolen  from  the  acceptor  and  another  person  filled  in  his  own  name 
and  negotiated  the  bill,  it  was  held  that  there  could  be  no  recovery 
on  such  acceptance  even  by  a  bona  fide  holder  for  value.  Barn- 
well, L.  J.,  said :  "  The  defendant  here  has  not  voluntarily  put  into 
any  one's  hands  the  means,  or  part  of  the  means,  for  committing 
a  crime.  But  it  is  said  that  he  had  done  so  through  negligence.  I 
confess  I  think  he  has  been  negligent — that  is  to  say,  I  think  if  he 
had  had  this  paper  from  a  third  person  as  a  bailee  bound  to  keep  it 
with  ordinary  care,  he  would  not  have  done  so.  But  then  this 
negligence  is  not  the  proximate  or  effective  cause  of  the  fraud.  A 
crime  was  necessary  for  its  completion."  The  same  rule  was  ap- 
plied where  a  check  signed  in  blank  by  the  drawer  was  stolen  and, 
after  being  filled  out,  was  negotiated  to  a  holder  for  value.  Linick 
v.  Nutting,  140  App.  Div.  (N.  Y.)  265. 

Agreement  that  others  shall  sign. — Where  a  promissory  note  is 
delivered  by  the  maker  to  the  payee,  upon  a  verbal  agreement  that 
the  instrument  shall  not  take  effect  until  other  persons  shall  have 
signed,  the  paper  will  have  no  validity  as  between  the  original  par- 
ties, unless  so  completed.  Hodge  v.  Smith,  130  Wis.  326.  If  only 
part  of  such  other  signatures  be  obtained,  the  party  first  signing 
may  defend  on  the  ground  that  the  instrument  was  never  either 
completed  or  delivered,  while  the  other  parties  may  defend  on  the 
ground  of  fraud,  even  though  they  themselves  signed  uncondition- 
ally, for  the  reason  that  the  paper  never  took  effect  as  to  the  condi- 
tional maker.     (Id.)     See  note  to  section  55. 

§  16.  Necessity  for  delivery  —  presumption  of  — 
when  effectual  —  when  presumed. —  Every  contract 
on  a  negotiable  instrument  is  incomplete  and  revoc- 
able until  delivery  of  the  instrument  for  the  pur- 
pose of  giving  effect  thereto.  As  between  immediate 
parties,  and  as  regards  a  remote  party  other  than  a 


44  THE   NEGOTIABLE  INSTRUMENTS  LAW. 

holder  in  due  course,  the  delivery,  in  order  to  be  ef- 
fectual, must  be  made  either  by  or  under  the  author- 
ity of  the  party  making,  drawing,  accepting  or  in- 
dorsing, as  the  case  may  be;  and  in  such  case  the  de- 
livery may  be  shown  to  have  been  conditional,  or  for  a 
special  purpose  only,  and  not  for  the  purpose  of  trans- 
ferring the  property  in  the  instrument.  But  where 
the  instrument  is  in  the  hands  of  a  holder  in  due  course, 
a  valid  delivery  thereof  by  all  parties  prior  to  him  so 
as  to  make  them  liable  to  him  is  conclusively  presumed. 
And  where  the  instrument  is  no  longer  in  the  posses- 
sion of  a  party  whose  signature  appears  thereon,  a 
valid  and  intentional  delivery  by  him  is  presumed  until 
the  contrary  is  proved. 

Variant  readings. — In  North  Carolina  the  words  "  accepting 
or,"  between  the  words  "  drawing  "  and  "  indorsing  "  in  the  sec- 
ond sentence  are  omitted.  In  Kansas  the  third  sentence,  which 
provides  for  a  conclusive  presumption  of  delivery  in  favor  of  a 
holder  in  due  course,  is  omitted.  In  South  Dakota  the  sentence 
beginning  with  the  word  ' '  But  ' '  and  ending  with  tbe  word  ' '  pre- 
sumed "  is  struck  out,  and  the  following  substituted  therefor: 
"An  indorsee  of  a  negotiable  instrument  in  due  course,  acquires 
an  absolute  title  thereto,  so  that  it  is  valid  in  his  hands,  notwith- 
standing any  provision  of  law  making  it  generally  void  or  void- 
able, and  notwithstanding  any  defect  in  the  title  of  the  person 
from  whom  he  acquired  it." 

Necessity  for  delivery — Like  other  written  contracts,  a  bill  of 
exchange  or  promissory  note  has  no  legal  inception  or  valid  exist- 
ence as  such  until  it  has  been  delivered  in  accordance  with  the  pur- 
pose and  intent  of  the  parties.  Burson  v.  Huntington,  21  Mich. 
416.  And  the  paper  takes  effect  from  the  time  of  its  delivery,  and 
not  from  its  date,  as  until  the  maker  parts  with  the  possession  and 
control  of  the  instrument  he  may  cancel  it  or  dispose  of  it  as  he 
pleases.  Burr  v.  Beekler,  264  111.  230.  The  provision  in  the  first 
sentence  of  this  section  does  not  render  incomplete  a  promissory 
note  indorsed  in  blank  by  the  payee  and  afterwards  stolen  from 
him  by  the  maker  and  presented  by  the  thief  to  a  bank  which  dis- 
ccunts it  in  good  faith,  because  such  a  note  takes  effect  when  de- 


FORM   AND  INTERPRETATION.  45 

livered  by  the  maker  to  the  payee,  and  is  made  payable  to  bearer 
by  the  payee's  indorsement  in  blank  before  the  theft.  Massachu- 
setts National  Bank  v.  Snow,  187  Mass.  160. 

Instrument  payable  to  order  of  drawer. — A  paper  purporting  to 
be  a  bill  of  exchange  payable  to  the  order  of  the  drawer,  does  not 
come  into  existence  as  a  bill  until  it  is  delivered  as  well  as  in- 
dorsed by  the  drawer.     Stouffer  v.  Curtis,  198  Mass.  560. 

Conditional  delivery. — The  rule  was  well  established  before  the 
adoption  of  the  statute  that  a  negotiable  instrument  may  be  de- 
livered upon  a  condition,  the  observance  of  which  is  essential  to  its 
validity  as  between  the  parties;  and  parol  evidence  of  such  a  con- 
dition was  not  deemed  an  attempt  to  vary  or  contradict  the  writ- 
ten contract.  Niblock  v.  Sprague,  200  N.  Y.  390 ;  Hodge  v.  Smith, 
130  Wis.  326;  McFarland  v.  Sikes,  54  Conn.  250.  And  by  the 
express  language  of  section  16,  this  is  the  rule  adopted  in  the 
statute.  Sayre  v.  Leonard,  57  Colo.  116.  Thus,  as  between  the 
original  parties,  it  can  be  shown  by  parol  evidence  that  the  note, 
although  delivered,  was  only  to  become  binding  in  case  the  maker 
should  sell  certain  bonds  placed  in  his  hands  as  agent  for  sale. 
Hill  v.  Hall,  191  Mass.  253.  Nor  does  the  Negotiable  Instruments 
Law  or  the  Statute  of  Frauds  require  that  a  contract  of  condi- 
tional delivery  shall  be  in  writing.  Norman  v.  McCarthy,  56  Colo. 
290. 

Holder  in  due  course. — When  the  instrument  is  in  the  hands  of 
a  holder  in  due  course,  then,  under  the  express  language  of  section 
16,  a  valid  delivery  is  conclusively  presumed.  Borough  of  Mont- 
vale  v.  Peoples'  Bank,  71  N.  J.  L.  464;  Schaeffer  v.  Marsh,  90 
Misc.  (N.  Y.)  307.  Thus,  as  against  a  holder  in  due  course  the 
drawer  of  a  check  cannot  show  that  it  was  delivered  by  his  clerk 
without  his  authority.  Buzzell  v.  Tobin,  201  Mass.  1.  In  this 
respect  the  statute  changes  the  law  in  some  of  the  states.  In 
some  cases  it  was  held  that  an  instrument  in  the  form  of  a  nego- 
tiable promissory  note,  which  had  never  been  delivered  by  the 
alleged  maker,  had  no  legal  existence  as  a  note,  and  the  party 
sought  to  be  charged  upon  it  might  always,  unless  estopped  by 
his  own  negligence,  defend  successfully  against  it,  without  re- 
gard to  the  time  when,  or  the  circumstances  under  which,  it 
was  acquired  by  the  holder.  Eoberts  v.  McGrath,  38  Wis.  52; 
Chipman  v.  Tucker,  38  Wis.  43;  Griffiths  v.  Kellogg,  39  Wis.  290; 


46  THE  NEGOTIABLE  INSTRUMENTS  LAW. 

Burson  v.  Huntington,  21  Mich.  416.  This  change,  like  some 
others  made  by  the  Act,  was  to  facilitate  the  circulation  of  com- 
mercial paper.  The  provision  does  not  apply,  however,  in  the  case 
of  an  incomplete  instrument  completed  and  negotiated  without 
authority.    See  section  15. 

Pleading  delivery — Proof  of  title. — An  allegation  that  a  prom- 
issory note  was  made  by  the  defendants  is  equivalent  to  an  allega- 
tion and  imports,  not  only  that  it  was  signed,  but  also  that  it  was 
delivered  to  take  effect  as  a  negotiable  instrument.  First  Nat.  Bank 
v.  Stallo,  160  App.  Div.  (N.  Y.)  702.  And  an  allegation  that  the 
note  was  made  payable  to  the  order  of  the  plaintiff  shows  that  the 
delivery  was  to  him,  and  sufficiently  shows  his  ownership.  Id.  Nor 
need  the  plaintiff  allege  that  he  has  not  parted  with  possession  or 
title.  Id.  Possession  of  the  instrument  is  prima  facie  evidence  of 
title.  Newcombe  v.  Fox,  1  App.  Div.  (N.  Y.)  389;  Chandler  v. 
Hedrick,  187  Mo.  App.  664. 

§  17.   Construction  where  instrument  is  ambiguous. 

— "Where  the  language  of  the  instrument  is  ambiguous, 
or  there  are  omissions  therein,  the  following  rules  of 
construction  apply: 

1.  Where  the  sum  payable  is  expressed  in  words  and 
also  in  figures  and  there  is  a  discrepancy  between  the 
two,  the  sum  denoted  by  the  words  is  the  sum  payable  ; 
but  if  the  words  are  ambiguous  or  uncertain,  refer- 
ence may  be  had  to  the  figures  to  fix  the  amount; 

2.  Where  the  instrument  provides  for  the  payment 
of  interest,  without  specifying  the  date  from  which 
interest  is  to  run,  the  interest  runs  from  the  date  of 
the  instrument,  and  if  the  instrument  is  undated,  from 
the  issue  thereof; 

3.  Where  the  instrument  is  not  dated,  it  will  be  con- 
sidered to  be  dated  as  of  the  time  it  was  issued; 

4.  Where  there  is  a  conflict  between  the  written  and 
printed  provisions  of  the  instrument,  the  written  pro- 
visions prevail; 

5.  Where  the  instrument  is  so  ambiguous  that  there 


FORM  AND  INTERPRETATION.  47 

is  doubt  whether  it  is  a  bill  or  note,  the  holder  may 
treat  it  as  either  at  his  election; 

6.  Where  a  signature  is  so  placed  upon  the  instru- 
ment that  it  is  not  clear  in  what  capacity  the  person 
making  the  same  intended  to  sign,  he  is  to  be  deemed 
an  indorser; 

7.  Where  an  instrument  containing  the  words  "I 
promise  to  pay"  is  signed  by  two  or  more  persons, 
they  are  deemed  to  be  jointly  and  severally  liable 
thereon. 

Variant  readings. — The  North  Carolina  subdivision  two  is 
omitted.  In  Wisconsin  the  following  is  added  at  the  end  of  the 
section:  "  8.  Where  several  writings  are  executed  at  or  about 
the  same  time,  as  parts  of  the  same  transaction,  intended  to  ac- 
complish the  same  object,  they  may  be  construed  as  one  and  the 
same  instrument  as  to  all  parties  having  notice  thereof."  No 
one  will  quarrel  with  this  statement  of  a  general  legal  proposi- 
tion; but  why  it  should  have  been  inserted  in  the  Negotiable  In- 
struments Law  is  not  easy  to  discover. 

Marginal  figures — Effect  of. — The  figures  in  the  margin  of  a 
bill  or  note  are  regarded  as  simply  a  memorandum  or  abridgement 
for  convenience  or  reference,  and  form  no  part  of  the  instrument. 
Smith  v.  Smith,  1  R.  I.  388 ;  Norwich  Bank  v.  Hyde,  13  Conn.  281 ; 
Schreyer  v.  Hawkes,  22  Ohio  St.  308.  Where  the  marginal  figures 
of  a  bill  were  245  1.,  but  the  words  "two  hundred  pounds"  were 
written  in  the  body  of  the  instrument,  it  was  held  to  be  for  the  lat- 
ter sum.  Saunderson  v.  Piper,  5  Bing.  N.  C.  425.  In  Garrard  v. 
Lewis  (L.  R.  10  Q.  B.  Div.  30,  32),  Lord  Justice  Bowen,  speaking 
of  the  import  and  effect  of  marginal  figures  at  the  head  of  a  bill 
of  exchange,  said :  "  They  do  not  seem  in  general  to  have  been  con- 
sidered among  merchants  as  of  the  same  effect  and  value  as  the 
mention  of  the  sum  contained  in  the  body  of  the  bill.  The  history 
of  these  marginal  figures  may  perhaps  be  shortly  summarized  a3 
follows :  The  first  model  of  a  bill  of  exchange  preserved  to  us,  and 
which  dates  from  1381,  does  not,  I  believe,  possess  them,  though  it 
does  possess  the  nature  or  vocation  with  which  merchants'  bills  used 
generally  to  commence,  and  which  usually  preceded  the  figures. 


48  THE   NEGOTIABLE  INSTRUMENTS  LAW. 

The  marginal  figure  at  the  head  of  a  bill  was  probably  added  at  a 
very  early  date,  in  order  that  the  amount  of  the  bill  might  strike 
the  eye  immediately,  and  was  in  fact  a  note,  index  or  summary  of 
the  contents  of  the  bill  which  followed." 

Where  rate  of  interest  not  specified. — Where  a  note  read  "with 

interest  at  the  rate  of  —  per  cent,  from  until  paid,"  it  was 

held  that  the  note  drew  interest  at  the  legal  rate  from  its  date. 
Hornstein  v.  Cifuno,  86  Neb.  103.    So,  where  the  note  read  ' '  with 

interest  at  per  cent,  per  annum."     Franklin  Nat.  Bank  v. 

Roberts,  168  N.  C.  473.  The  legal  effect  of  not  filling  in  the  blank 
is  the  same  as  if  there  had  been  nothing  written  or  printed  after 
the  word  "  interest."     Id. 

Instrument  not  dated. — See  Kingsley  v.  Sampson,  100  III.  54. 
As  to  the  right  of  the  holder  to  fill  in  the  date,  see  section  14. 

Conflict  between  written  and  printed  portions. — The  rule  de- 
clared in  the  statute  is  that  which  applies  to  contracts  gener- 
ally. Chadsey  v.  Guion,  97  N.  Y.  333.  It  applies  where  there  is 
a  conflict  between  provisions  which  are  typewritten  and  those 
written  by  hand.  Acme  Coal  Co.  v.  Northrup  Nat.  Bank,  146 
Pac.  Rep.  (Wyo.)  593.  In  the  case  last  cited  there  was  a  con- 
flict as  to  the  rate  of  interest,  the  figure  "7"  being  typewritten 
and  the  figure  "8"  written  with  pen  and  ink.  The  court  said: 
"Had  the  figure  '7'  been  printed  in  the  blank  as  it  was  printed 
on  the  printing  press,  and  the  figure  '8'  written  with  pen  and 
ink,  the  rule  of  the  statute  would  unquestionably  apply.  The 
question  here  is :  Is  that  portion  of  this  note  which  is  typewritten 
to  be  considered  as  printed  or  as  written1?  When  we  consider 
what  we  consider  to  be  the  reason  for  the  rule  as  laid  down  in 
the  statute,  and  the  connection  with  which  the  words  'written' 
and  'printed'  were  there  used,  we  think  the  question  is  not  diffi- 
cult of  solution.  The  printed  form  or  blank  is  used  for  conven- 
ience and  is  prepared  in  advance  of  the  final  agreement  between 
the  parties;  and  when  a  conflicting  provision  is  afterward  inserted 
therein  in  writing,  the  natural  and  reasonable  presumption  is  that 
the  later  and  written  provision  expresses  the  true  intent  of  the 
parties."  But  this  rule  does  not  permit  of  the  rejection  of  any  of 
the  printed  matter  which  by  any  reasonable  construction  may  be 
reconciled  with  the  written  part.  Miller  v.  Hannibal  &  St.  Jo.  R. 
R.  Co.,  90  N.  Y.  430;  Magee  v.  Lovell,  L.  R.  9  C.  P.  107;  Joyce  v. 
Realm  Ins.  Co.,  L.  R.  7  Q.  B.  580. 


FORM   AND  INTERPRETATION.  49 

Uncertainty  as  to  character  of  paper. — See  Heise  v.  Burnpass, 
40  Ark.  547.  Where  the  instrument  ran  "On  demand,  I  promise 
to  pay  A.  B.,  or  bearer,  the  sum  of  fifteen  pounds,  value  re- 
ceived," and  was  addressed  in  the  margin  to  one  J.  Bell,  who 
wrote  upon  it,  "Accepted,  J.  Bell,"  it  was  considered  to  be  in 
effect  the  note  of  J.  Bell,  as  it  contained  a  promise  to  pay,  al- 
though, in  terms,  it  was  an  acceptance.  Block  v.  Bell,  1  M.  &  R. 
149.  So,  where  the  instrument  was  in  the  following  form :  ' '  Lon- 
don, August  5, 1833.  Three  months  after  date  I  promise  to  pay  Mr. 
John  Bury  or  order  forty-four  pounds,  eleven  shillings,  and  five 
pence,  value  received,  John  Bury,"  and  was  addressed  in  the 
lower  left-hand  corner  "J.  B.  Grutherot,  35  Montague  Place,  Bed- 
ford Place,"  and  Grutherot 's  name  was  written  across  the  face 
as  an  acceptance,  and  Bury's  name  across  the  back  as  an  indorse- 
ment, it  was  held  that  Bury  might  be  held  either  as  the  drawer 
of  the  bill  against  Grutherot,  or  as  the  maker  of  the  note,  and 
therefore  was  bound  without  notice  of  dishonor.  Edis  v.  Bury, 
6  Barn.  &  Cres.  433.  In  another  case  the  instrument  ran:  "Two 
months  after  date  I  promise  to  pay  A.  B.  or  order  ninety-nine 
pounds,  H.  Oliver,"  and  was  addressed  to  J.  E.  Oliver  and  ac- 
cepted by  him.  The  court  said :  "It  is  not  unjust  to  presume 
that  it  was  drawn  in  this  form  for  the  purpose  of  suing  upon  it 
either  as  a  promissory  note  or  as  a  bill  of  exchange."  Lloyd  v. 
Oliver,  18  Q.  B.  471. 

Uncertainty  as  to  capacity. — For  example,  if  a  person  should 
write  his  name  across  the  face  of  a  note,  he  would,  under  sub- 
section six  be  deemed  an  indorser.  There  are  some  decisions 
which  hold  that  in  such  case  he  would  be  deemed  a  joint  maker. 
It  is,  perhaps,  not  very  important  which  view  is  adopted,  so  that 
the  rule  upon  the  subject  is  fixed  and  certain.  Throughout  the  act 
it  has  been  the  policy  to  make  all  irregular  parties  indorsers.  See 
section  64.  In  Germania  Nat.  Bank  v.  Mariner,  129  Wis.  544, 
a  note  read :  "  '  Four  months  after  date  the  Northwestern  Straw 
Works  promise  to  pay,'  etc.,  and  was  signed  'The  Northwestern 
Straw  Works,  E.  R.  Stillman,  Treas. ;  John  W.  Mariner."  Mari- 
ner was  the  secretary  of  the  corporation,  duly  authorized  to  sign 
the  note  on  its  behalf: — Held,  that  the  signature  of  Mariner  was 
not  so  placed  on  the  instrument  as  to  make  it  doubtful  in  what 
capacity  he  intended  to  sign,  within  the  meaning  of  this  section. 
The  court  said :  ' '  This  provision,  by  its  very  terms,  applies  only 
4 


50  THE   NEGOTIABLE  INSTRUMENTS  LAW. 

to  a  case  of  doubt  arising  out  of  the  location  of  the  signature 
upon  the  instrument.  Names  are  sometimes  placed  at  the  side, 
on  the  end,  or  across  the  face  of  the  instrument,  and  thus  a  doubt 
arises  as  to  whether  the  signer  intended  to  be  bound  as  a  maker 
or  indorser,  or  perhaps  as  a  guarantor,  and  to  solve  these  doubts 
the  section  in  question  was  evidently  framed.  It  was  to  settle  a 
doubt  fairly  arising  from  the  ambiguous  location  of  the  name,  and 
applies  to  no  other.  In  the  present  case  there  is  no  doubt  of  this 
nature.  The  signature  of  Mr.  Mariner  is  placed  in  the  usual  and 
proper,  in  fact  the  only  proper,  place  for  a  maker.  The  doubt 
arising  is  not  a  doubt  whether  he  intended  to  sign  as  maker,  in- 
dorser, or  guarantor,  for  it  is  clear  from  the  location  of  the  name 
that  he  did  not  intend  to  sign  as  indorser  or  guarantor,  but  sim- 
ply a  doubt  whether  he  intended  to  sign  in  an  individual  Or  in 
a  representative  capacity  as  maker.  To  say  that,  where  it  con- 
clusively appears  from  the  instrument  that  the  signer  intended 
to  sign  as  a  maker,  the  statute  is  intended  to  make  him  an  in- 
dorser, would  be  little  short  of  ridiculous.  The  statute  was  passed 
to  meet  a  case  where  it  is  doubtful  from  the  instrument  whether 
a  man  intended  to  become  an  indorser,  not  to  make  an  indorser 
out  of  a  person  who,  without  doubt,  intended  to  sign  as  a  maker, 
either  individually  or  as  representative  of  another.  We  have  no 
doubt,  therefore,  that  this  section  has  no  application  to  the  pres- 
ent case."  Where  two  officers  of  a  corporation  indorsed  on  the 
company's  demand  note  the  following  words:  "For  value  re- 
ceived, we  hereby  guarantee  the  prompt  payment  of  this  note,'* 
and  followed  the  words  with  their  signatures,  they  were  held 
liable  as  sureties,  and  not  as  guarantors  of  the  instrument.  Iron 
City  National  Bank  v.  Rafferty,  207  Pa.  St.  238. 

Two  or  more  signing  where  note  is  in  the  singular. — See  Monson 
v.  Drakeley,  40  Conn.  559;  Solomon  v.  Hopkins,  61  Conn.  47; 
Dart  v.  Sherwood,  7  Wis.  523. 

§  18.  Only  persons  signing  liable  —  trade  or  as- 
sumed name. — No  person  is  liable  on  the  instrument 
whose  signature  does  not  appear  thereon,  except  as 
herein  otherwise  expressly  provided.  But  one  who 
signs  in  a  trade  or  assumed  name  will  be  liable  to  the 
same  extent  as  if  he  had  signed  in  his  own  name. 


FORM  AND  INTERPRETATION.  51 

Variant  readings. — In  Wyoming  the  word  "  expressly  "  in  the 
first  sentence  is  omitted. 

Necessity  for  signature.— Persons  dealing  with  negotiable  in- 
struments are  presumed  to  take  them  on  the  credit  of  the  parties 
whose  names  appear  upon  them,  and  a  person  not  a  party  cannot 
be  charged  upon  proof  that  the  ostensible  party  signed  or  indorsed 
as  his  agent.  Manufacturers',  etc.,  Bank  v.  Love,  13  App.  Div. 
(N.  Y.)  561;  Briggs  v.  Partridge,  64  N.  Y.  363.  Under  this  sec- 
tion, a  firm  upon  whom  a  draft  is  drawn  by  its  commercial  trav- 
eller is  not  liable  thereon  before  acceptance  by  reason  of  any 
custom  in  previous  years  to  honor  such  drafts.  Seattle  Shoe  Co. 
v.  Packard,  43  Wash.  527. 

Trade  or  assumed  name. — A  person  may  become  a  party  to  a 
bill  or  note  by  any  mark  or  designation  he  chooses  to  adopt,  pro- 
vided it  be  used  as  a  substitute  for  his  name  and  he  intends  to 
be  bound  by  it.  De  Witt  v.  Walton,  9  N.  Y.  571;  Brown  v.  But- 
chers' &  Drovers'  Bank,  6  Hill,  443.  In  the  case  last  cited, 
which  was  a  suit  against  the  defendant  as  indorser  of  a  bill  of 
exchange,  the  indorsement  was  made  with  a  lead  pencil  in  figures, 
thus,  "1,2,  8." 

§  19.  Signature  by  agent — authority — how  shown. — 

The  signature  of  any  party  may  be  made  by  a  duly  au- 
thorized agent.  No  particular  form  of  appointment  is 
necessary  for  this  purpose;  and  the  authority  of  the 
agent  may  be  established  as  in  other  cases  of  agency. 

Variant  readings. — In  Kentucky  the  words  "  an  agent  duly  au- 
thorized in  writing  "  are  substituted  for  "  duly  authorized 
agent."  Speaking  of  this  change,  the  Court  of  Appeals  of  that 
state  said  in  a  late  case :  ' '  The  reason  for  adopting  the  section 
that  appears  in  the  law  in  place  of  the  proposed  section  [that  is, 
proposed  by  the  Commissioners  on  Uniform  Laws]  is  not  known; 
but  that  the  present  section  is  radically  different  in  its  meaning 
from  the  proposed  section  is  manifest.  The  section  as  proposed 
simply  contained  the  declaration  in  statutory  form  of  an  old  and 
well  recognized  principle  of  the  law  of  agency  generally,  as  well 
as  in  the  law  of  agency  as  applied  to  commercial  paper,  while  the 
section  as  amended  prescribes  that  the  authority  of  the  agent  must 


52  THE   NEGOTIABLE   INSTRUMENTS   LAW. 

be  in  writing.  *  *  *  It  may  not  have  been  a  wise  change  to 
have  made.  It  may  in  some  instances  work  harm  and  injustice 
in  the  administration  of  the  law,  but  if  so,  the  remedy  is  with 
the  legislature  and  not  the  courts."    Finley  v. .Smith,  1G5  Ky.  445. 

Proof  of  agency. — This  section  permits  proof  of  the  ostensible 
authority  of  the  agent  to  act  for  his  principal.  Grant  County 
State  Bank  v.  Northwestern  Land  Co.,  28  N.  D.  479.  But  what 
shall  constitute  sufficient  proof  of  such  ostensible  authority  is 
left  to  the  common  law.    In  re  Estate  of  Chismore,  166  Iowa  217. 

§  20.  Signature  on  behalf  of  principal — personal  lia- 
bility— liability   of  person   signing  as   agent,   etc. — 

Where  the  instrument  contains  or  a  person  adds  to  his 
signature  words  indicating  that  he  signs  for  or  on  be- 
half of  a  principal,  or  in  a  representive  capacity,  he  is 
not  liable  on  the  instrument  if  he  was  duly  authorized; 
but  the  mere  addition  of  words  describing  him  as  an 
agent,  or  as  filling  a  representative  character,  without 
disclosing  his  principal,  does  not  exempt  him  from  per- 
sonal liability. 

Variant  readings. — In  Virginia  the  words  "  without  disclosing 
his  principal  "  are  interpolated  after  the  words  "  representative 
capacity  "  and  before  the  word  "•  he." 

Liability  of  person  signing  without  authority. — In  the  original 
draft  submitted  to  the  Conference  of  Commissioners  on  Uniform- 
ity of  Laws  this  section  read  as  follows:  "Where  a  person  adds 
to  his  signature  words  indicating  that  he  signs  for  or  on  behalf 
of  a  principal,  or  in  a  representative  capacity,  he  is  not  liable 
on  the  instrument;  but  the  mere  addition  of  words  describing 
him  as  an  agent,  or  as  filling  a  representative  character,  does  not 
exempt  him  from  personal  liability.  In  determining  whether  a 
signature  is  that  of  the  principal  or  of  the  agent  by  whose  hand 
it  is  written,  that  construction  is  to  be  adopted  which  is  most 
favorable  to  the  validity  of  the  instrument."  This  is  the  English 
rule,  and  was  the  rule  in  New  York  prior  to  the  statute.  Under 
that  rule  a  person  signing  for  or  on  behalf  of  a  principal  was 
not  liable  on  the  instrument,  notwithstanding  he  had  no  authority 


FORM   AND  INTERPRETATION.  53 

to  bind  his  principal.  There  was  an  implied  warranty  on  his 
part  that  he  possessed  such  authority,  and  if  he  did  not,  he  be- 
came liable  upon  such  warranty  for  the  damages  resulting  from 
the  breach.  Miller  v.  Reynolds,  92  Hun,  400.  But  no  action 
could  be  maintained  against  him  on  the  instrument,  when  by  its 
terms  it  did  not  purport  to  bind  him.  And  his  liability  upon  the 
implied  warranty  did  not  accompany  the  transfer  of  the  instru- 
ment, unless  the  claim  founded  upon  the  warranty  was  also  as- 
signed to  the  person  to  whom  the  instrument  was  transferred. 
(Id.)  The  effect  of  the  section,  as  it  now  stands,  is,  probably, 
to  permit  the  holder  to  sue  the  agent  on  the  instrument,  if  he 
was  not  duly  authorized  to  sign  the  same  on  behalf  of  the  prin- 
cipal. 

Words  which  are  descriptio  personae. — Thus,  he  is  not  relieved 
from  liability  by  adding  the  descriptive  term  "  trustee,"  Bank  v. 
Looney,  99  Tenn.  278,  or  "administrator,"  or  "guardian,"  Emm  v. 
Carroll,  1  Yerger,  144 ;  McWherter  v.  Jackson,  10  Humphrey,  208 ; 
Carter  v.  Wolf,  1  Heisk,  674,  or  "  agent,"  Sumwalt  v.  Eigeley,  20 
Md.  107,  or  "  secretary,"  Daniel  v.  Glidden,  38  Wash.  556.    Where 
a  negotiable  promissory  note  has  been  given  for  the  payment  of  a 
debt  contracted  by  a  corporation,  and  the  language  of  the  promise 
tloes  not  disclose  the  corporate  obligation,  and  the  signatures  to  the 
paper  are  in  the  names  of  individuals,  a  holder,  taking  bona  fide  and 
without  notice  of  the  circumstances  of  its  making,  is  entitled  to 
hold  the  note  as  the  personal  undertaking  of  its  signers,  notwith- 
standing tbey  affix  to  their  names  the  title  of  an  office.     Such  an 
affix  will  be  regarded  as  descriptive  of  the  persons,  and  not  of  the 
character  of  the  liability.    Unless  the  promise  purports  to  be  by  the 
corporation,  it  is  that  of  the  persons  who  subscribe  to  it;  and  the 
fact  of  adding  to  their  names  an  abbreviation  of  some  official  title 
has  no  legal  signification  as  qualifying   their  obligation,  and   im- 
poses no  obligation   upon  the  corporation  whose  officers  they   may 
be.    This  rule  is  founded  on  the  general  principle  that  in  a  contract 
every  material  thing  must  be  definitely  expressed  and  not  left  to 
conjecture.     Unless  the  language  creates,  or  fairly  implies,  the  un- 
dertaking of  the  corporation,  or  if  the  purpose  is  equivocal,  the  ob- 
ligation is  that  of  its  apparent  makers.     Casco  National  Bank  v. 
Clark,  139  N.  Y.  307,  310;  First  Nat.  Bank  v.  Wallis,  150  N.  Y. 
455.    In  Megowan  v.  Peterson,  173  N.  Y.  1,  it  was  held  that  a  trus- 
tee of  an  insolvent  firm,  for  the  benefit  of  creditors  thereof,  ap- 


54  THE  NEGOTIABLE  INSTRUMENTS  LAW. 

pointed  by  such  firm  and  its  creditors,  is  not  personally  liable  un- 
der this  section,  upon  a  note  signed  by  him  as  "  trustee,"  but  with- 
out disclosing  his  representative  capacity  upon  the  face  of  the  note, 
where  the  payee  is  one  of  such  creditors  and  the  consideration  for 
which  the  note  was  given  was  property  purchased  from  the  payee 
for  the  benefit  of  the  trust  estate.  The  court,  speaking  of  this  pro- 
vision of  the  statute,  said :  "  We  do  not  understand  that  the  statute 
to  which  we  have  alluded  was  designed  to  change  the  common-law 
rule  in  this  regard,  which  is  to  the  effect  that,  as  between  the  origi- 
nal parties  and  those  having  notice  of  the  facts  relied  upon  as  con- 
stituting a  defense,  the  consideration  and  the  conditions  under 
which  the  note  was  delivered  may  be  shown."  See  also  Kerby  v. 
Euegamer,  107  App.  Div.  (K  Y.)  491 ;  Crandall  v.  Rollins,  83  Id. 
618;  Jump  v.  Sparling,  218  Mass.  324. 

Signatures  of  corporate  officers. — The  cases  in  which  this  sec- 
tion has  been  applied  have  been  mainly  cases  where  the  signatures 
were  made  by  officers  of  corporations.  Under  the  provisions  of  this 
section,  which  is  merely  a  legislative  declaration  of  the  common  law 
rule,  an  officer  of  a  corporation,  who,  after  the  name  of  the  cor- 
poration written  or  stamped  as  the  maker  of  the  note,  signs  his 
name  without  any  qualification  or  description,  or  without  adding  his 
official  title  is  prima  facie  personally  responsible  on  the  note.  Bel- 
mont Dairy  Co.  v.  Thrasher,  124  Md.  320.  And  the  use  of  the  form 
"  we  promise  to  pay,"  suggests  that  it  was  the  intention  that  he  was 
to  be  personally  bound.  (Id.)  And  if  he  signs  his  own  name  after 
that  of  the  corporation  merely  to  complete  the  signature  of  the  cor- 
poration, and  not  with  the  intention  of  making  himself  personally 
liable,  he  must,  in  order  to  escape  liability,  make  it  appear  that  such 
was  the  understanding  of  the  parties  when  the  paper  was  issued. 
(Id.)  Where  the  name  of  a  religious  corporation  indorsed  upon 
its  promissory  note  was  followed  by  the  names  of  its  president  and 
treasurer,  the  words  "  finance  committee  "  and  the  names  of  the 
persons  constituting  such  committee,  the  indorsement  was  held  to 
come  within  this  section,  and  to  negative  any  personal  liability  on 
the  part  of  the  individual  signers.  Chelsea  Exchange  Bank  v.  First 
U.  P.  Church,  89  Misc.  (N.  Y.)  616. 

Parol  evidence  to  show  representative  character. — The  statute 
does  not  abrogate  the  rule  of  evidence  which  permitted  the  person 
signing  to  show  that  it  was  not  the  intention  of  the  parties  that  he 
should  be  personally  bound.    Phelps  v.  Weber,  84  N.  J.  Law  630; 


FORM  AND  INTERPRETATION.  55 

Jump  v.  Sparling,  218  Mass.  324;  Myers  v.  Chesley,  177  S.  W.  Rep. 
326;  Dunbar  Box  &  L.  Co.  v.  Martin,  53  Misc.  (N.  Y.)  312. 

§  21.  Signature  by  procuration  —  effect  of. — A  sig- 
nature by  "  procuration  "  operates  as  notice  that  the 
agent  has  but  a  limited  authority  to  sign,  and  the  prin- 
cipal is  bound  only  in  case  the  agent  in  so  signing 
acted  within  the  actual  limits  of  his  authority. 

Variant  reading. — In  Illinois  the  word  "  only,"  after  the  word 
"  bound,"  is  omitted. 

Meaning  of  term  per  procuration. — The  words  "per  procura- 
tion" have  a  special  technical  significance.  They  are  an  express 
intimation  of  a  special  and  limited  authority;  and  a  person  taking 
e  bill  so  drawn,  accepted,  or  indorsed,  is  bound  to  inquire  into  the 
extent  of  the  authority.  Byles  on  Bills,  33.  But  an  indorsement 
by  an  agent  "  per  pro  "  which  is  within  the  powers  conferred  upon 
him  is  binding  upon  his  principal  as  against  bona  fide  holders  for 
value,  though  the  agent  abused  his  authority.  Bryant  v.  La  Banque 
du  Peuple  [1893],  App  Cases,  170.  The  term  is  seldom,  if  ever, 
used  in  this  country. 

§  22.  Indorsement  by  infant  or  corporation  —  effect 
of. — The  indorsement  or  assignment  of  the  instrnment 
by  a  corporation  or  by  an  infant  passes  the  property 
therein,  notwithstanding  that  from  want  of  capacity 
the  corporation  or  infant  may  incur  no  liability  thereon. 

Variant  reading. — In  North  Carolina  the  words  "  or  married 
woman  "  are  inserted  after  the  word  "  infant  "  in  both  places. 

Indorsement  by  corporation. — Thus,  if  a  note  should  be  drawn 
payable  to  the  order  of  a  corporation,  and  the  corporation  should 
indorse  the  same  without  consideration,  such  indorsement  would 
pass  the  title  to  a  subsequent  holder  with  notice  of  the  facts,  though 
the  corporation  would  not  be  liable  to  him  as  an  indorser.  See  note 
to  section  29. 

Indorsement  by  infant. — The  statute  changes  the  law.  See 
Roach  v.  Woodhall,  91  Tenn.  206.  The  change,  like  others,  was 
made  to  facilitate  the  ready  and  safe  transfer  of  commercial  paper. 


56  THE   NEGOTIABLE  INSTRUMENTS  LAW. 

§  23.  Forged    signature    inoperative  —  estoppel. — 

Where  a  signature  is  forged  or  made  without  the  au- 
thority of  the  person  whose  signature  it  purports  to 
be,  it  is  wholly  inoperative,  and  no  right  to  retain  the 
instrument,  or  to  give  a  discharge  therefor,  or  to  en- 
force payment  thereof  against  any  party  thereto,  can 
be  acquired  through  or  under  such  signature,  unless 
the  party,  against  whom  it  is  sought  to  enforce  such 
right,  is  precluded  from  setting  up  the  forgery  or 
want  of  authority. 

Variant  reading. — In  Illinois  the  words  "  of  the  person  whose 
signature  it  purports  to  be  "  are  omitted.  , 

Unauthorized  signature. — For  cases  applying  the  statute,  see 
Seaboard  Nat.  Bank  v.  Bank  of  America,  193  N.  Y.  26;  Mercantile 
Nat.  Bank  v.  Silverman,  148  App.  Div.  (N.  Y.)  1;  Stein  v.  Empire 
Trust  Co.,  Id.  850;  Jett  v.  Standafer,  143  Ky.  787. 

Where  some  of  the  signatures  are  genuine. — But  it  does  not  fol- 
low from  the  provisions  of  this  section  that  proof  of  one  forged 
signature  on  a  note  must  of  necessity,  and  in  all  cases,  be  given 
effect  to  avoid  the  note  in  favor  of  those  whose  signatures  thereto 
are  found  to  be  genuine.  It  is  the  forged  or  unauthorized  signa- 
ture that  is  declared  to  be  inoperative;  and  the  inhibitory  clause 
forbids  recovery  on  the  instrument  as  against  any  party  where  the 
right  of  recovery  is  predicated  on  such  inoperative  signature.  Beem 
v.  Farrell,  135  Iowa,  670. 

Diversion  of  paper  by  agent  indorsing. — The  agent  of  the  plain- 
tiff who  had  power  of  attorney  to  receive  and  indorse  checks  for 
the  plaintiff  and  to  deposit  them  in  certain  banks,  indorsed  them 
with  the  name  of  the  plaintiff,  to  whom  they  were  payable,  adding 
his  own  indorsement,  and  transferred  them  to  certain  stockbrokers 
with  whom  he  was  speculating,  as  margins  on  his  personal  transac- 
tions, the  brokers  having  knowledge  of  the  agency.  Held,  that  the 
unauthorized  diversion  of  the  checks  by  the  agent,  after  indorse- 
ment, did  not  make  the  original  indorsement  of  the  plaintiff's  name 
a  forgery  under  this  section.  Salen  v.  Bank  of  State  of  New  York, 
110  App.  Div.  (N.  Y.)  636. 

Mistake  as  to  identity  of  payee.— P,  by  fraudulently  represent- 
ing himself  to  be  H,  obtained  a  check  from  T,  payable  to  the  order 


FORM   AND  INTERPRETATION.  57 

of  H.  At  the  time,  T  knew  of  the  existence  of  H,  and  delivered  the 
check  to  P  supposing  that  he  was  H.  P  indorsed  H's  name  on  the 
check,  and  gave  it  to  D,  who  collected  the  money  thereon  from  the 
bank,  which  charged  the  same  against  the  account  of  T.  Held, 
that  under  this  section  the  signature  made  by  P  transferred  no  in- 
terest, and  that  T  could  recover  the  amount  from  the  bank.  Tol- 
man  v.  American  National  Bank,  22  R.  I.  462.  Stiness,  C.  J.  said : 
"  We  have  referred  to  authorities  because  the  defendant's  counsel 
so  earnestly  and  ably  argued  that  the  act  did  not  alter  the  law-mer- 
chant that  it  seemed  proper  to  show  that  the  law  in  this  respect, 
outside  of  the  act,  is  in  a  very  unsatisfactory  state  and  that  the  act 
is  right.  We  do  not  think  that  the  act  does  alter  the  law  as  it  was 
when,  a  few  years  ago,  it  seems  to  have  been  switched  off  on  a 
fallacy  in  some  places.  One  of  the  advantages  of  the  act  is  in  set- 
tling the  question.  Waiving  the  question  of  forgery,  about  which 
the  cases  we  have  cited  differ,  the  signature  in  this  case  is  clearly 
one  '  made  without  the  authority  of  the  person  whose  signature  it 
purports  to  be,  'and,  therefore,  it  is  '  wholly  inoperative.'  This  be- 
ing so,  the  defendant  cannot  justify  its  action  under  it,  there  being 
no  evidence  of  any  conduct  by  the  plaintiff  to  mislead  the  defend- 
ant and  so  to  estop  his  present  claim.  As  the  case  stood,  the  plain- 
tiff had  ordered  money  paid  to  Haskell.  The  bank  had  not  so  paid 
it.  The  fact  that  the  plaintiff  had  been  imposed  upon  did  not  re- 
lieve the  bank  from  its  duty  to  see  that  the  money  was  paid  ac- 
cording to  order."  But  where  the  instrument  is  intended  for  the 
person  to  whom  it  is  delivered,  his  indorsement  will  pass  a  good 
title  to  a  holder  in  due  course,  though  he  procured  the  same  by 
falsely  representing  himself  to  be  another  person  of  the  same  name. 
Jamieson  v.  McFarland,  43  Wash.  153.  The  difference  between  the 
two  cases  is,  that  in  the  former,  the  drawer  of  the  check  or  draft 
intends  it  for  a  particular  person  other  than  the  one  to  whom  he 
delivers  it;  in  the  latter  case,  the  person  to  whom  he  delivers  it  is, 
in  fact,  the  one  for  whom  he  intended  it.  Compare  Land,  etc.  Co. 
v.  Northwestern  Nat.  Bank,  196  Pa.  St.  230.    See  note  to  section  9. 

Ratification— Estoppel. — Where  the  transaction  is  contrary  to 
good  faith  and  the  fraud  affects  individual  interests  only,  ratifi- 
cation is  allowed;  but  where  the  fraud  is  of  such  a  character  as 
to  involve  a  crime  the  adjustment  of  which  is  forbidden  by  public 
policy,  the  ratification  of  the  act  from  which  it  springs  is  not 
permitted.     Forgery  does  not  admit  of  ratification.  A  forger  does 


58  THE  NEGOTIABLE  INSTRUMENTS  LAW. 

not  act  on  behalf  of,  nor  profess  to  represent,  the  person  whose 
handwriting  he  counterfeits;  and  the  subsequent  adoption  of  the 
instrument  cannot  supply  the  authority  which  the  forger  did  not 
profess  to  have.  Henry  Christian  Building  and  Loan  Association 
v.  Walton,  181  Pa.  St.  201;  Lyon  v.  Phillips,  106  Pa.  St.  57.  But 
cases  sometimes  arise  where  parties  are  estopped  to  dispute  the 
genuineness  of  their  signatures.  Crout  v.  DeWolf,  1  R.  I.  393. 
Thus,  where  a  customer  has  been  guilty  of  negligence  in  examin- 
ing the  account  and  vouchers  returned  to  him  by  his  bank,  he  will 
not  be  permitted  to  dispute  the  account  because  some  of  the 
checks  are  forgeries.  Leather  Manufacturers'  Nat.  Bank  v.  Mor- 
gan, 117  U.  S.  96.  Where  one  whose  name  has  been  forged  to  a 
note  has  received  no  benefit  from  the  forgery,  and  the  forger  was 
not  his  agent  for  any  purpose,  he  is  not  bound,  as  a  matter  of 
legal  duty,  when  the  note  is  first  shown  to  him,  to  repudiate  or 
disclaim  at  once  the  genuineness  of  the  signature.  His  failure  to 
do  so  is  evidence,  in  the  nature  of  an  admission,  which  may  be 
considered  as  bearing  upon  the  question  whether  he  assumed  the 
signature  as  his  own,  but  it  is  not  conclusive.  Traders'  National 
Bank  v.  Rogers,  167  Mass.  315.  As  to  what  conduct  will  amount 
to  an  estoppel,  see  Terry  v.  Bissel,  26  Conn.  41;  Pettyjohn  v.  Nat. 
Ex.  Bank,  101  Va.  111.  A  married  woman,  to  shield  her  husband, 
ratified  a  signature  on  a  promissory  note  to  a  bank,  purporting  to 
be  hers  but  forged  by  her  husband.  At  maturity  the  note  was  sur- 
rendered to  the  husband  on  his  giving  in  renewal  a  note  similarly 
forged  which  was  accepted  in  good  faith  by  the  bank.  In  an  ac- 
tion by  the  bank  on  the  first  note,  it  was  held,  that  the  substitution 
and  acceptance  of  the  second  forged  note  did  not  constitute  a  pay- 
ment, so  as  to  bar  an  action  on  the  note  ratified  by  the  defendant. 
Central  National  Bank  v.  Copp,  184  Mass.  328. 

Traveler's  checks. — A  banking  company  issuing  traveler's 
checks,  which  are  first  signed  by  the  payee,  and  are  to  be  paid 
by  the  correspondent  of  the  drawer  when  countersigned  by  the 
payee,  is  liable  to  the  payee  for  the  value  of  such  a  check  lost  or 
stolen,  and  paid  by  the  drawer  on  the  forged  countersignature  of 
the  payee.    Sullivan  v.  Knauth,  161  App.  Div.  (N.  Y.)  148. 


CONSIDERATION.  59 


ARTICLE  III. 

Consideration. 

Section  24.  Presumption  of  consideration. 

25.  What  constitutes  value. 

26.  Value  given  by  prior  holder. 

27.  Lienor  as  holder  for  value. 

28.  Failure  of  consideration. 

29.  Accommodation  party — definition — liabil- 

ity. 

§  24.  Presumption  of  consideration. — Every  negoti- 
able instrument  is  deemed  prima  facie  to  have  been 
issued  for  a  valuable  consideration;  and  every  person 
whose  signature  appears  thereon  to  have  become  a 
party  thereto  for  value. 

Importance  of  presumption. — In  Lassas  v.  McCarty,  47  Ore. 
474,  it  was  said  that  the  presumption  of  the  statute  that  a  prom- 
issory note  was  given  for  a  sufficient  consideration  is  of  much 
importance  in  business  transactions,  and  should  not  be  lightly 
disregarded,  in  favor  of  those  who  have  carelessly,  or  by  being 
unduly  confiding,  set  afloat  commercial  paper. 

Words  "value  received." — The  words  "  value  received,"  com- 
monly used  in  notes  and  bills,  are  surplusage  in  a  negotiable  instru- 
ment; for  their  omission  does  not  in  any  way  affect  the  legal  im- 
port of  the  paper,  or  weaken  the  presumption  that  it  was  given  for 
value.  McLeod  v.  Hunter,  29  Misc.  (N.  Y.)  559.  But  in  the  ease 
of  a  non-negotiable  instrument,  they  are  important,  for  they 
amount  to  an  admission  that  the  instrument  was  issued  for  a  suf- 
ficient consideration.  Owen  v.  Blackburn,  161  App.  Div.  (N.  Y.) 
827;  Du  Bosque  v.  Munroe,  168  Id.  821. 

Pleading — Burden  of  proof. — It  is  not  necessary  for  the  plain- 
tiff to  allege  that  there  was  a  consideration,  since  that  is  pre- 
sumed.    First  Nat.  Bank  v.  Stallo,  160  App.  Div.   (N.  Y.)   702. 


CO  THE   NEGOTIABLE   INSTRUMENTS   LAW. 

And  the  production  of  the  paper  establishes  prima  facie  that 
there  was  a  consideration.  Dawson  v.  Wombles,  123  Mo.  App. 
340;  Bank  of  Monticello  v.  Dooly,  113  Wis.  590,  593;  Hickok  v. 
Bunting,  92  App.  Div.  (N.  Y.)  167;  Bringman  v.  Von  Glahn,  71 
Id.  537;  Lynchburg  Milling  Co.  v.  Nat.  Exchange  Bank,  109  Va. 
039;  Carter  v.  Butler,  264  Mo.  306;  Murphy  v.  Estate  of  Skinner, 
160  Wis.  554;  Hamilton  v.  Diefenderfer,  21  Wyo.  66.  But  when 
this  presumption  is  met  by  proof  tending  to  rebut  it,  then,  on 
the  question  whether  there  was  a  consideration,  the  burden  of 
proof  is  on  the  holder  throughout  the  trial.  Lombard  v.  Byrne, 
194  Mass.  236,  238.  As  to  the  effect  of  a  failure  to  deny  that  the 
paper  was  given  for  value,  see  Benedict  v.  Kress,  97  App.  Div. 
(N.  Y.)   65. 

§  25.  What  constitutes  value  —  antecedent  debt. — 

Value  is  any  consideration  sufficient  to  support  a  sim- 
ple contract.  An  antecedent  or  pre-existing  debt  con- 
stitutes value;  and  is  deemed  such  whether  the  instru- 
ment is  payable  on  demand  or  at  a  future  time. 

Variant  readings. — In  Illinois  the  second  sentence  reads  as  fol- 
lows: "An  antecedent  or  pre-existing  claim,  whether  for  money 
or  not,  constitutes  value  where  an  instrument  is  taken  either  in 
satisfaction  therefor  or  as  security  therefor,  and  is  deemed  such, 
whether  the  instrument  is  payable  on  demand  or  at  a  future  time. ' ' 
In  Wisconsin  the  words  "  discharged,  extinguished  or  extended  " 
are  interpolated  after  the  words  "  pre-existing  debt;"  and  the 
following  is  added  at  the  end  of  the  section:  "  But  the  indorse- 
ment or  delivery  of  negotiable  paper  as  collateral  security  for  a 
pre-existing  debt,  without  other  consideration,  and  not  in  pur- 
suance of  an  agreement  at  the  time  of  delivery,  by  the  maker, 
does  not  constitute  value." 

Non-negotiable  bills  and  notes. — While  the  statute  applies  only 
to  instruments  which  are  negotiable,  yet  by  the  law  merchant  a 
bill  of  exchange,  though  it  lacks  the  words  payable  "to  order" 
or  to  "bearer,"  which  are  essential  to  negotiability  (see  section 
2)  imports  a  consideration,  and  the  statute  has  not  altered  this 
rule,  since  it  provides  that  in  any  case  not  provided  for  in  the  act, 
the  law  merchant  shall  goverr.  f  Section  196.)  But  as  regards  the 
presumption  of  consideration  in  the  case  of  non-negotiable  notes, 


CONSIDERATION.  61 

the  law  of  New  York  and   some   of  the   other  states  has  been 
changed.     See  note  to  section  184. 

What  constitutes  value. — See  Conover  v.  Stillwell,  34  N.  J. 
Law,  54;  Eaton  v.  Libbey,  165  Mass.  218;  Whitney  v.  Clary,  145 
Mass.  156;  Shawmut  Nat.  Bank  v.  Manson,  168  Mass.  425;  Ray- 
mond v.  Sellick,  10  Conn.  480. 

Antecedent  debt — Common-law  rule.— The  general  rule  is  that 
where  a  conveyance  is  made  or  security  taken,  the  consideration 
of  which  is  an  antecedent  debt,  the  grantee  or  the  person  taking 
the  security  is  not  regarded  as  a  purchaser  for  a  valuable  con- 
sideration. People's  Savings  Bank  v.  Bates,  120  U.  S.  556,  565; 
Weaver  v.  Borden,  49  N.  Y.  286;  Cary  v.  White,  52  N.  Y.  138; 
Wood  v.  Robinson,  22  N.  Y.  567;  Mingus  v.  Condit,  23  N.  J.  Eq. 
313.  But  in  the  Supreme  Court  of  the  United  States,  and  in  many 
of  the  State  courts,  a  distinction  was  made  in  favor  of  commer- 
cial paper,  and  the  rule  adopted  that  a  bona  fide  holder  taking  a 
negotiable  instrument  in  payment  of,  or  as  security  for,  an  ante- 
cedent debt,  is  a  holder  for  a  valuable  consideration  entitled  to 
protection  against  all  the  equities  between  the  antecedent  parties. 
Railroad  Company  v.  National  Bank,  102  U.  S.  14;  Swift  v.  Ty- 
son, 16  Pet.  1;  National  Revere  Bank  v.  Morse,  163  Mass.  381; 
Rockville  Nat.  Bank  v.  Citizens'  Gas  Light  Co.,  72  Conn.  576; 
Roberts  v.  Hall,  37  Conn.  205 ;  Bridgeport  City  Bank  v.  Welch,  29 
Conn.  475;  Harrold  v.  Kays,  64  Mich.  439;  Fitzgerald  v.  Booker, 
96  Mo.  661;  Spencer  v.  Sloan,  108  Ind.  183;  Quinn  v.  Hoord,  43 
Vt.  375 ;  Armour  v.  McMichael,  36  N.  J.  Law,  92 ;  Fisher  v.  Fisher, 
98  Mass.  303 ;  Roberts  v.  Hall,  37  Conn.  205 ;  Giovanovich  v.  Citi- 
zens'  Bank,  26  La.  Ann.  15;  Maitland  v.  Citizens'  Nat.  Bank,  40 
Md.  540;  Robins  v.  Lair,  31  Iowa,  9;  Hotchkiss  v.  Fitzgerald 
Patent,  etc.,  Co.,  41  W.  Va.  357;  Fair  v.  Howard,  6  Nev.  304; 
Levy  v.  Ford,  41  La.  Ann.  873.  This  exception  to  the  general 
rule  was  based  upon  considerations  of  commercial  policy,  and  was 
peculiar  to  commercial  paper.  But  prior  to  the  adoption  of  the  stat- 
ute, it  was  well  settled  in  New  York  and  several  other  states,  that 
one  who  acquired  commercial  paper  as  collateral  security  for  a 
pre-existing  debt  was  not  a  holder  for  value.  Comstock  v.  Hier, 
73  N.  Y.  269;  McBride  v.  Farmers'  Bank,  26  N.  Y.  450;  Codding- 
ton  v.  Bay,  20  Johns.  637;  Schaeffer  v.  Fowler,  111  Pa.  St.  451; 
Martin  v.  Bank,  94  Tenn.  176;  Roach  v.  Wodall,  91  Tenn.  206; 
Jenkins  v.  Schnaub,  14  Wis.  1;  Brooks  v.  Sullivan,  129  N.  C.  190. 


62  THE  NEGOTIABLE  INSTRUMENTS  LAW. 

This  rule  produced  many  subtle  refinements,  and  it  would  bo 
impossible  to  reconcile  all  the  decisions  on  the  subject.  See  note 
to  nest  section.  For  the  former  law  in  the  case  of  accommodation 
paper  pledged  as  security,  see  Stephen  v.  Monongahela  National 
Bank,  88  Pa.  St.  157;  National  Union  Bank  v.  Todd,  132  Pa.  St. 
312. 

Draft  purchased  for  antecedent  debt. — Under  this  section  a  bank 
which  acquires  a  draft  by  purchase  from  another  bank  for  an  ex- 
isting indebtedness  is  a  holder  for  value.  Murchison  Nat.  Bank  v. 
Dunn  Oil  Mills,  150  N.  C.  718,  719. 

Exchange  of  notes. — One  promissory  note  is  a  good  considera- 
tion for  another  given  in  exchange.  Franklin  Bank  v.  Roberts, 
168  N.  C.  473;  Mehlinger  v.  Harriman,  185  Mass.  245. 

Promise  to  pay  debt. — The  promise  to  pay  an  already  existing 
debt,  or  the  actual  payment  thereof,  is  not  "  value  "  within  the 
meaning  of  this  section.  Morris  County  Brick  Co.  v.  Austin,  79 
N.  J.  Law,  273. 

Giving  credit. — Under  this  section  a  bank  which  merely  gives  a 
customer  credit  on  its  books  for  paper  deposited  does  not  become 
a  holder  for  value,  but  in  order  to  have  this  effect,  the  credit  must 
be  drawn  upon.  Commercial  Nat.  Bank  v.  Citizens'  State  Bank, 
132  Iowa,  706;  Miller  v.  Norton,  114  Va.  610;  Elgin  City  Bank- 
ing Co.  v.  Hall,  119  Tenn.  548.    See  note  to  section  52. 

Accommodation  paper. — A  pre-existing  debt,  without  extension 
or  forbearance,  is  a  sufficient  consideration  upon  which  to  hold  an 
accommodation  party  where  there  has  been  no  restriction  placed 
upon  the  use  of  the  paper.  Lehrenkrauss  v.  Bonnell,  199  N.  Y. 
240;  Maurice  v.  Fowler,  78  Misc.  (N.  Y.)  357. 

§  26.  Value  given  by  prior  holder. — Where  value 
lias  at  any  time  been  given  for  the  instrument,  the 
holder  is  deemed  a  holder  for  value  in  respect  to  all 
parties  who  become  such  prior  to  that  time. 

Consideration  for  subsequent  acceptance. — If  a  party  becomes 
a  hona  fide  holder  for  value  of  a  bill  before  acceptance,  it  is  not 
essential  to  his  right  to  enforce  it  against  a  subsequent  acceptor 


CONSIDERATION.  63 

that  an  additional  consideration  should  proceed  from  him  to  the 
drawee.  The  bill  itself  implies  a  representation  by  the  drawer  that 
the  drawee  is  already  in  receipt  of  funds  to  pay,  and  his  contract 
is  that  the  drawee  shall  accept  and  pay  according  to  the  terms 
of  the  draft.  The  drawee  can,  of  course,  upon  presentment  refuse 
to  accept,  and  in  that  event  the  only  recourse  of  the  holder  is 
against  the  prior  parties  thereto;  but  in  case  the  drawee  does 
accept  the  bill,  he  becomes  primarily  liable  for  its  payment,  not 
only  to  the  indorsees,  but  also  to  the  drawer  himself.  Heuerte- 
matte  v.  Morris,  101  N.  Y.  70;  National  Park  Bank  v.  Saitta,  127 
App.  Div.  (N.  Y.)  624. 

§  27.  Lienor  a  holder  for  value  —  to  what  extent. — 
Where  the  holder  has  a  lien  on  the  instrument,  arising 
either  from  contract  or  by  implication  of  law,  he  is 
deemed  a  holder  for  value,  to  the  extent  of  his  lien. 

Effect  of  the  statute. — In  New  York  for  some  time  after  the 
adoption  of  the  statute,  there  was  a  tendency  in  the  Appellate 
Divisions  of  the  First  and  Second  Departments  to  hold  that  the 
statute   had  not  changed  the  rule  which  had  prevailed  in  this 
state  since  the  decision  in  Coddington  v.  Bay   (20  Johns.  637), 
that  one  who  had  acquired  commercial  paper  as  collateral  security 
for  a  pre-existing  debt  was  not  a  holder  for  value.     Sutherland 
v.  Mead,  80  App.  Div.  (N.  Y.)  103;  Roseman  v.  Mahony,  86  App. 
Div.   (N.  Y.)   377;  Bank  of  America  v.  Waydell,  103  App.  Div. 
(N.  Y.)  25,  33.    But  the  later  New  York  cases,  without  expressly 
overruling  these  decisions,  have  held  that  the  statute  established 
the  rule  which  had  prevailed  in  the  Federal  Courts,  viz. :  that  the 
transfer  of  a  bill  or  note  as  security  for  an  antecedent  debt  is 
sufficient  to  constitute  the  transferee  a  holder  for  value.     King 
v.  Bowling  Green  Trust  Co.,  145  App.  Div.  398,  402;  Maurice  v. 
Fowler,  78  Misc.  Rep.  357;  Martin  L.  Hall  Co.  v.  Todd,  139  N.  Y. 
Supp.  Ill;  Broderick  &  Bascom  Rope  Co.  v.  McGrath,  81  Misc. 
199,  200.     See  also  Brewster  v.  Shrader,  26  Misc.  Rep.  480.  In 
the  case  last  cited,  Judge  Werner,  now  of  the  New  York  Court 
of  Appeals,  said:  "The  language  of  this  section,  when  given  its 
usual  and  ordinary  signification,  ought  to  leave  no  room  for  doubt 
upon  the  subject.    There  is,  however,  such  a  universal  disposition 
among  lawyers  to  look  for  some  hidden  or  subtle  meaning  in  the 


04  THE   NEGOTIABLE   INSTRUMENTS  LAW. 

most  simple  language,  that  it  has  become  quite  the  fashion  to 
require  the  courts  to  construe  statutes,  which,  to  the  average  lay- 
mind,  seem  to  require  no  construction.     If  the  language  of  the 
section  under  consideration  were  not  obviously  clear  and  unequi- 
vocal, and  there  were  need  of  ascertaining  the  legislative  intent 
in  order  to  give  proper  effect  to  such  language,  the  history  of  the 
subject,  of  the  judicial  decisions  in  England  and  the  states  of 
this  country,  and  of  the  proceedings  of  the  commission  on  uni- 
formity of  laws,  leave  no  possible  doubt  as  to  the  purpose  of  this 
section."     And  after  reviewing  the   history  of  the   statute   the 
learned  judge  continued:  "It  seems  evident,  therefore,  from  the 
history  of  this  subject,  as  well  as  from  the  obvious  purpose  for 
which  this  statute  was  enacted,  no  less  than  from  the  language 
of  the  statute  itself,  that  the  New  York  rule,  so  called,  has  been 
modified  so  as  to  conform  to  the  rule  in  England  and  in  our  Fed- 
eral court  of  last  resort."    And  in  all  the  other  states  where  the 
question  has  arisen,  the  courts  have  held  that  the  legislative  in- 
tent to  establish  the  federal  rule  is  clear.     Bruner  v.  New  Uni- 
versal Fertilizer  Co.,  218  Mass.  300;  Lowell  v.  Bickford,  201  Mass. 
543;  Voss  v.  Chamberlain,  139  Iowa,  569;  Graham  v.  Smith,  155 
Mich.  65;  Elk  Valley  Coal  Co.  v.  Third  Nat.  Bank,  157  Ky.  617; 
Brooks  v.  Sullivan,  129  N.  C.  190;  Payne  v.  Zell,  98  Va.  294;  Felt 
v.  Bush,  41  Utah,  467;  German  Amer.  State  Bank  v.  Lyons,  127 
Minn.  390;  National  Bank  of  Commerce  v.  Morris,  156  Mo.  App. 
51,  52;  Smathers  v.  Toxaway  Hotel  Co.,  162  N.  C.  346;  German- 
Am.  Bank  v.  Wright,  148  Pac.  Rep.  (Wash.)  769;  Melton  v.  Pen- 
sacola  Bank  &  Trust  Co.,  190  Fed.  Rep.  126,  111  C.  C.  A.  166; 
Lust  Co.  v.  Markee,  179  Fed.  764.     When  the  provisions  of  sec- 
tion twenty-seven  are  considered  together  with  the  provisions  of 
section  twenty-five  the  intent  seems  to  be  clear.     The  holder,  who 
has  taken  the  paper  as  collateral  security,  very  plainly  has  a  lien 
upon  it,  and,  therefore,  is  within  the  terms  of  section  twenty-seven. 
The  only  question  then  is,  whether  he  must  be  excluded  from  the 
operation  of  this  section  merely  because  his  lien  was  acquired  for 
an  antecedent  indebtedness.     But  as  the  statute  in  another  place 
expressly  declares  that  "  an  antecedent  or  pre-existing  debt  con- 
stitutes value  "  (sec.  25)  there  is  no  warrant  for  reading  any  such 
exception  into  the  section. 

Extent  of  lien. — Thus,  a  bank,  having  in  its  possession  nego- 
tiable securities  of  its  customer,  would  be,  by  virtue  of  its  general 


CONSIDERATION.  65 

lien,  a  holder  for  value  to  the  extent  of  the  balance  due  from 
such  customer.  So,  any  person  to  whom  negotiable  securities 
are  pledged  as  collateral  would  be  a  holder  for  value  to  the  extent 
of  the  amount  due  to  him.  Wilkins  v.  Usher,  123  Ky.  696;  Fifth 
Nat.  Bank  v.  MeCrory,  177  S.  W.  Rep.  (Mo.  App.)  1058.  But 
if  such  securities  should  be  sold  to  pay  such  balance  or  debt, 
the  purchaser,  if  a  holder  in  due  course  within  section  52,  though 
he  should  pay  less  than  their  face  value  for  them,  could  enforce 
them  for  the  full  amount  thereof.    See  section  57. 

Right  to  sue. — Under  sections  27  and  51  a  person  who  holds  a 
note  or  bill  as  collateral  security  may  sue  thereon.  Mersick  v. 
Alderman,  77  Conn.  634;  American  Nat.  Bank  v.  Hill,  85  S.  E.  Rep. 
(N.  C.)  209. 

Amount  of  recovery. — Ordinarily  the  pledgee  is  entitled  to  re- 
cover the  full  amount  due  on  the  instrument,  with  liability  to  ac- 
count for  the  surplus  to  the  pledgor.  Camden  Nat.  Bank  v.  Fries- 
Breslin  Co.,  214  Pa.  St.  395.  But  if  the  pledgor  could  not  recover 
upon  the  instrument,  then  the  extent  of  the  recovery  will  be  lim- 
ited to  the  amount  of  the  debt  due  to  the  pledgee.  Benton  v. 
Likyta,  84  Neb.  808;  Elk  Valley  Coal  Co.  v.  Third  Nat.  Bank, 
157  Ky.  617.  See  also  Stoddard  v.  Kimball,  6  Cush.  469;  Fisher 
v.  Fisher,  98  Mass.  303;  Chicopee  Bank  v.  Chapin,  8  Mete.  40. 
The  principle  upon  which  the  rule  is  founded  is  that,  in  such  case, 
the  pledgee  would  hold  the  surplus  for  the  pledgor,  and  as  the  pa- 
per in  the  hands  of  the  pledgor  is  void,  all  that  ought  to  be  re- 
covered by  the  pledgee  is  the  amount  due  him.  Burner  v.  New 
Universal  Fertilizer  Co.,  218  Mass.  300. 

Where  principal  debt  not  due. — The  fact  that  the  principal  obli- 
gation was  not  due  at  the  time  of  bringing  the  suit  is  no  defense; 
for  the  pledgee  has  the  right  to  enforce  the  collection  of  a  col- 
lateral note,  even  though  the  principal  debt  is  not  yet  due.  Elk 
Valley  Coal  Co.  v.  Third  Nat.  Bank,  157  Ky.  617. 

§  28.  Failure  of  consideration  —  partial  failure. — 

Absence  or  failure  of  consideration  is  matter  of  de- 
fense as  against  any  person  not  a  holder  in  due  course; 
and  partial  failure  of  consideration  is  a  defense  pro 
tanto,  whether  the  failure  is  an  ascertained  and  liqui- 
dated amount  or  otherwise. 
5 


CG  THE   NEGOTIABLE   INSTRUMENTS  LAW. 

Where  plaintiff  not  holder  in  due  course. — As  against  any  person 
not  a  holder  in  due  course,  while  the  paper  itself  is  prima  facie 
evidence  of  the  consideration,  the  question  of  consideration  is  al- 
ways open ;  and  it  is  competent  for  the  defendant  to  show  by  parol 
that  there  was  no  sufficient  consideration,  or  that  the  considera- 
tion has  failed.  Hermann  v.  Combs,  119  Md.  41;  Tatum  v.  Com- 
mercial Bank,  185  Ala.  249;  Batterman  v.  Dutcher,  95  App.  Div. 
(N.  Y.)  213;  Ferguson  v.  Netter,  141  Id.  274;  Cowee  v.  Cornell, 
75  N.  Y.  91,  98;  Anthony  v.  Valentine,  130  Mass.  119;  Ingersoll 
v.  Martin,  58  Md.  67;  Corlies  v.  Howe,  11  Gray,  125;  Brenneman 
v.  Furniss,  90  Pa.  St.  186.  But  under  the  express  terms  of  the 
statute  failure  of  consideration  is  not  a  defense  as  against  a 
holder  in  due  course.  Franz  v.  Schiro,  136  La.  842;  Interstate 
Finance  Co.  v.  Schroder,  74  W.  Va.  67. 

Burden  of  proof. — Under  the  statute,  the  burden  of  proving 
failure  of  consideration  is  on  the  party  alleging  it.  Piner  v.  Brit- 
tain,  165  N.  C.  401;  Bank  of  Gresham  v.  Walch,  157  Pac.  Kep. 
(Ore.)  534;  Bringman  v.  Von  Glahn,  71  App.  Div.  (N.  Y.)  537; 
Carter  v.  Butler,  264  Mo.  306,  330.  And  this  was  the  rule  prior 
to  the  adoption  of  the  statute.  Jennison  v.  Stafford,  1  Cush.  168. 
Total  failure  of  consideration  does  not  impose  upon  an  innocent 
holder  the  burden  of  proving  that  he  gave  value  for  the  paper. 
Wilson  v.  Lazier,  11  Gratt.  477;  Albrecht  v.  Atrimpler,  7  Pa.  St. 
476. 

Negotiability. — The  failure  of  consideration  does  not  affect  the 
negotiability  of  the  instrument.  Dingman  v.  Amsink,  77  Pa.  St. 
114. 

Renewal.— If  at  the  maturity  of  a  negotiable  promissory  note 
which  was  without  consideration,  the  maker  makes  a  partial  pay- 
ment thereon  and  gives  a  new  note  for  the  balance,  the  new  note  ia 
without  consideration,)  and  no  action  can  be  maintained  thereon  by 
the  payee  against  the  maker.    Seager  v.  Drayton,  218  Mass.  571. 

Estoppel. — The  maker  of  a  note  who  induces  another  to  pur- 
chase it  from  the  payee,  assuring  him  that  it  is  valid  and  will  be 
paid,  cannot  set  up  the  illegality  of  the  consideration  against  the 
assignee.    Holzbog  v.  Bakrow,  156  Ky.  161. 

Where  instrument  is  past  due. — The  mere  fact  that  an  accom- 
modation note  was  transferred  by  the  party  accommodated  after 


CONSIDERATION.  67 

due  to  a  holder  for  value,  does  not  permit  the  maker  to  defeat  re- 
covery upon  the  ground  that  the  note  was  for  accommodation  and 
without  consideration  moving  to  him.  Marling  v.  Jones,  138  Wis. 
82,  90. 

Exchange  of  notes. — Upon  an  exchange  of  promissory  notes, 
each  note  is  a  valid  consideration  for  the  other,  and  is  fully  avail- 
able in  the  hands  of  the  holder;  and  the  fact  that  one  of  the  notes 
is  not  paid  at  maturity  does  not  sustain  a  defense  of  failure  of  con- 
sideration in  an  action  upon  the  other.  Rice  v.  Grange,  131  N.  Y. 
149;  Woman  v.  Frost,  52  N.  Y.  422. 

Partial  failure  of  consideration. — See  Black  v.  Rigway,  131 
Mass.  80;  Cline  v.  Miller,  8  Md.  274;  Davis  v.  Wait,  12  Oregon, 
425. 

Unliquidated  claims. — The  rule,  both  in  this  country  and  in 
England,  has  been  that  whenever  the  defendant  is  entitled  to  go  into 
the  question  of  consideration  he  may  set  up  the  partial,  as  well  as 
the  total,  want  of  consideration.  Daniel  on  Negotiable  Instruments, 
§  210.  But  it  has  been  held  in  some  cases  that  the  part  alleged  to 
have  failed  must  be  distinct  and  definite,  for  only  a  total  failure 
or  the  failure  or  a  specific  and  ascertained  part  can  be  availed  of 
by  way  of  defense;  and  in  the  case  of  an  unliquidated  claim  the 
party  must  resort  to  his  cross  action.  Pulsifer  v.  Hotchkiss,  12 
Conn.  234;  Drew  v.  Towle,  7  Post.  412;  Moggridge  v.  Jones,  14 
East.  485;  Trickey  v.  Larne,  6  M.  &  W.  278.  In  other  cases  it  is 
held  that  the  defendant  may  recoup  his  damages  though  they  be  un- 
liquidated. Davis  v.  Wait,  12  Oregon,  425;  Wyckhoff  v.  Runyon, 
33  N.  J.  Law,  107.  As  to  what  is  necessary  to  constitute  one  a 
holder  in  due  course,  see  sections  53-57. 

By  what  law  governed. — The  right  to  interpose  the  defense  of 
want  of  consideration  is  governed  by  the  lex  loci.  Herdic  v.  Roes- 
sler,  109  N.  Y.  127,  133. 

§  29.  Accommodation  party  —  definition  —  liability. 

An  accommodation  party  is  one  who  has  signed  the 

instrument  as  maker,  drawer,  acceptor  or  indorser, 
without  receiving  value  therefor,  and  for  the  purpose  of 
lending  his  name  to  some  other  person.  Such  a  person 
is  liable  on  the  instrument  to  a  holder  for  value,  not- 


C8  THE   NEGOTIABLE   INSTRUMENTS  LAW. 

withstanding  such  holder  at  the  time  of  taking  the  in- 
strument knew  him  to  be  only  an  accommodation 
party. 

Variant  reading.— In  Illinois  the  words  "  without  receiving 
value  therefor,  and,"  after  the  word  "  indorser  "  are  omitted,  and 
the  following  is  added  at  the  end  of  the  section:  "And  in  case  a 
transfer  after  maturity  was  intended  by  the  accommodating  party 
notwithstanding  such  holder  acquired  title  after  maturity." 

Meaning  of  terms. — The  words  "without  receiving  value  there- 
for" in  section  fifty-five  refer  to  the  instrument  itself,  and  not  to 
the  loan  of  the  name  by  way  of  accommodation.  Morris  County 
Brick  Co.  v.  Austin,  79  N.  J.  Law,  273. 

Basis  of  the  rule. — An  accommodation  note,  in  the  strict  sense, 
is  a  loan  of  the  maker's  credit,  without  instructions  as  to  the  man- 
ner of  its  use.  Lenheim  v.  Wilmarding,  55  Pa.  St.  73;  Bankers' 
Iowa  State  Bank  v.  Mason  Hand  Lathe  Co.,  121  Iowa,  570,  572.  He 
cannot  set  up  as  a  defense  that  it  was  given  without  consideration ; 
for  this  would  defeat  the  very  purpose  for  which  it  was  made.  Car- 
penter v.  National  Bank  of  the  Republic,  106  Pa.  St.  170,  172.  In 
respect  to  third  persons,  the  law  considers  him  in  the  character  he 
has  assumed,  and  will  not  permit  him  to  allege  that  the  paper  to 
which  he  gave  his  name  was  an  imposition,  nor  to  gainsay  its 
reality  by  proof  that  it  was  a  fiction.  It  shall  be  taken  pro  veritate 
that  he  was  the  maker,  for  de  veritate  that  was  the  very  thing  he 
was  intended  to  be.  Bank  of  Montgomery  County  v.  Walker,  9  S. 
&  R.  229;  Stephen  v.  Monongahela  National  Bank,  88  Pa.  St.  157, 
162-3.  And  this  is  the  rule  though  the  note  be  pledged  merely  as 
collateral  security  for  the  debt  of  the  payee.  Lord  v.  Ocean  Bank, 
20  Pa.  St.  381. 

Right  to  retract. — An  accommodation  indorser  has  the  right  to 
retract  his  indorsement  at  any  time  before  the  paper  is  negotiated. 
His  consent  to  be  indorser  is  necessary  to  make  him  such.  He  can- 
not be  compelled  to  indorse  whether  he  will  or  no;  and  as  the  in- 
strument is  a  mere  blank  piece  of  paper  until  it  passes  into  other 
hands  for  valuable  consideration,  it  follows  that  he  has  the  same 
right  to  retract  the  indorsement  already  made  as  he  had  to  refuse 
his  indorsement  in  the  first  instance;  that  is,  his  indorsement  and 
his  continuing  to  be  so  are  alike  voluntary  until  rights  arise  by  the 


CONSIDERATION.  69 

negotiation  to  third  parties.  Berkely  v.  Tinsley,  88  Vt.  1001,  1004. 
And  the  purchaser  of  an  accommodation  note,  after  its  maturity, 
gets  no  better  nor  greater  right  to  enforce  it  against  the  maker  or 
indorser  tiian  if  it  were  ordinary  negotiable  paper  given  for  value. 
Cottrell  v.  Watkins,  89  Va.  801. 

Exchange  of  notes. — A  mutual  exchange  of  notes  will  amount 
to  a  sufficient  consideration,  so  that  the  notes  will  not  be  regarded 
as  accommodation  paper.  Williams  v.  Banks,  11  Md.  198;  Rice  v. 
Grange,  131  N.  Y.  149 ;  Woman  v.  Frost,  52  N.  Y.  422. 

Married  woman  as  accommodation  party. — The  statute  does  not 
change  the  law  of  New  Jersey  so  as  to  validate  the  contract  of  a 
married  woman  obligating  her  as  surety  for  her  husband  or  to  pay 
the  debt  of  another  person.  People's  Nat.  Bank  v.  Schepflin,  73 
N.  J.  Law,  29,  38.  In  Massachusetts,  on  the  other  hand,  since  the 
Negotiable  Instruments  Act,  as  well  as  before,  if  a  married  woman 
indorses  for  accommodation  the  note  of  a  partnership  of  which  her 
husband  is  a  member  payable  to  him  and  indorsed  also  by  him,  she 
is  liable  on  her  contract  of  indorsement  to  a  bank  to  which  her 
husband  acting  for  the  partnership  negotiates  the  note.  Middle- 
borough  National  Bank  v.  Cole,  191  Mass.  168. 

Corporations  as  accommodation  parties. — The  provision  of  the 
Btatute  does  not  apply  to  corporations,  which,  as  a  general  rule,  are 
without  power  to  bind  themselves  as  accommodation  parties.  A 
national  bank  has  no  such  power,  National  Bank  of  Commerce  v. 
Atkinson,  55  Fed.  Rep.  465,  27  U.  S.  App.  88;  nor  has  a  state 
bank,  The  Bank  of  Genesee  v.  The  Patchin  Bank,  13  N.  Y.  309 ; 
Farmers'  &  Mechanics'  Bank  v.  Butchers'  &  Drovers'  Bank,  16  N. 
Y.  125,  128;  Morford  v.  The  Farmers'  Bank  of  Saratoga  County, 
26  Barb.  568;  nor  a  manufacturing  corporation,  Jacobus  v.  James- 
town Mantel  Co.,  211  N.  Y.  154;  The  Central  Bank  v.  The  Empire 
Stone  Dressing  Co.,  26  Barb.  23;  The  Bridgeport  City  Bank  v. 
The  Empire  Stone  Dressing  Co.,  30  Barb.  421;  The  Farmers'  & 
Mechanics'  Bank  v.  The  Empire  Stone  Dressing  Co.,  4  Bosw.  275 ; 
Wahlig  v.  The  Standard  Pump  Manufacturing  Co.,  25  N.  Y.  St. 
Rep.  864;  Filon  v.  The  Miller  Brewing  Co.,  38  N.  Y.  St.  Rep.  602; 
National  Bank  of  Newport  v.  Snyder  Manufacturing  Co.,  117  App. 
Div.  (N.  Y.)  371;  Monument  National  Bank  v.  Globe  Works,  101 
Mass.  57;  nor  a  railroad  company,  Davis  v.  Old  Colony  Railroad 
Company,  131  Mass.  258;  J.  G.  Brill  Co.  v.  Norton  &  Taunton  St. 


,70  THE  NEGOTIABLE  INSTRUMENTS   LAW. 

Ry.  Co.,  189  Mass.  431;  nor  a  warehousing  and  security  company, 
The  National  Park  Bank  v.  G.  A.  M.  W.  &  S.  Co.,  116  N.  Y.  281; 
nor  a  life  insurance  company,  Aetna  National  Bank  v.  Charter  Oak 
Life  Insurance  Company,  50  Conn.  167;  nor  a  turnpike  company, 
Hall  v.  Auburn  Turnpike  Co.,  27  Cal.  256;  nor  an  oil  company, 
Culver  v.  Reno  Real  Estate  Company,  91  Penn.  St.  367.     No  cor- 
porations organized  under  the  statutes  of  New  York  are  authorized 
to  bind  the  property  of  their  shareholders  by  accommodation  indorse- 
ments.    Fox  v.  Rural  Home  Co.,  90  Hun,  365,  367.     But  a  cor- 
poration having  a  general  power  to  issue  negotiable  paper,  and  to 
indorse  the  same  for  its  own  benefit  in  the  course  of  its  business, 
will  be  liable  on  its  accommodation  indorsement  when  the,  paper 
passes  into  the  hands  of  a  bona  fide  holder  for  value  before  matur- 
ity, without  notice  of  the  character  of  the  indorsement.     Cox  & 
Sons  Co.  v.  Northampton  Brewing  Co.,  245  Pa.  St.  418;  Central 
Trust   Co.   v.   Smurr  &  Kamen   Co.,   191  111.   App.   613.     And   a 
corporation,  having  either  express  or  implied  power  to  issue  negoti- 
able paper,  is  presumed  to  act  within  the  scope  of  such  power ;  and 
hence  there  is  a  presumption  in  favor  of  the  validity  of  negotiable 
paper  issued  by  it.    Id.   See  also  Howard  v.  Boorman,  17  Wis.  459 ; 
Lehigh  Valley  Coal  Co.  v.  WTest  Depere  Agr.  Works,  63  Wis.  45. 
When,  in  an  action  upon  a  promissory  note,  it  is  shown  without 
dispute   that   the   defendant,   a  manufacturing  corporation,  made 
a  note  for  the  accommodation  of  the  payee,  another  corporation, 
and  that  the  notes  were  renewed  from  time  to  time  by  the  payee, 
which  always  paid  the  discount,  the  defendant  is  entitled  to  a  rul- 
ing that  the  paper  is  accommodation  paper  within  the  terms  of 
the  statute,  and  it  is  error  to  submit  that  question  to  the  jury. 
Nat.  Bank  of  Newport  v.  Snyder  Manufacturing  Co.,  117  App. 
Div.  (N.  Y.)  370. 

Burden  of  proof  where  corporation  sought  to  be  held. — On  proof 
that  the  corporation  became  a  party  to  the  paper  for  accommoda- 
tion, the  holder  has  the  burden  of  showing  that  he  became  such 
holder  for  value,  and  without  notice  that  the  corporation  was  an 
accommodation  party.  Abbot  v.  LePrevost,  166  App.  Div.  (N.  Y.) 
40 ;  Jacobus  v.  Jamestown  Mantel  Co.,  211  N.  Y.  154. 

Notice  where  paper  negotiated  for  officer's  benefit. — Where  an 
officer  of  a  corporation  who  has  executed  a  note  on  behalf  of  the 
corporation   negotiates   the   same   for   his   individual   benefit,   the 


CONSIDERATION.  71 

holder  is  put  upon  inquiry.  Ward  v.  City  Trust  Co.,  192  N.  Y.  61. 
And  the  fact  that  another  officer  joins  in  the  execution  of  the  pa- 
per does  not  relieve  the  holder  from  the  duty  of  making  inquiry. 
Newman  v.  Newman,  160  App.  Div.  (N.  Y.)  331. 

Partner  indorsing  for  accommodation. — An  indorsement  by  a 
partner  of  his  separate  accommodation  note  with  the  name  of  his 
firm  is  a  sufficient  indication  of  the  nature  of  the  transaction  to 
make  it  the  duty  of  the  bank  which  discounts  it  to  inquire  into  his 
authority  to  use  the  firm  name  for  the  occasion,  unless  there  are 
circumstances  from  which  the  authority  can  be  implied.  Tanner 
v.  Hall,  1  Pa.  St.  417. 

Right  to  impose  conditions. — The  statute  does  not  change  the 
rule  that  an  accommodation  party  has  the  right  to  determine  for 
himself  what  use  shall  be  made  of  the  instrument  which  he  signs. 
He  may  impose  material  or  immaterial  conditions  and  terms,  and 
no  person  can  enforce  the  instrument  against  him  who  takes  it  in 
violation  of  such  terms  and  conditions  and  with  notice  thereof. 
Benjamin  v.  Rogers,  126  N.  Y.  60.  Thus,  where  the  defendant  in- 
dorsed a  note  upon  the  condition  that  it  should  not  be  negotiated 
in  New  York,  assigning  as  a  reason  that  he  did  not  wish  to  be  sued 
upon  it  in  the  state,  it  was  held  that,  while  the  restriction  did  not 
seem  to  be  material,  yet  the  diversion  was  a  defense  to  the  indorser 
as  against  one  who  was  not  a  holder  for  value.  United  States  Nat. 
Bank  v.  Ewing,  131  N.  Y.  506.  But  see  Rogers  v.  Sipley,  35  N.  J. 
Law,  86. 

Knowledge  of  holder  that  paper  was  for  accommodation. — For 
cases  in  which  this  provision  of  the  statute  has  been  applied,  see 
Packard  v.  Windholz,  88  App.  Div.  (N.  Y.)  365;  Smith  v.  State 
Bank,  104  N.  Y.  Supp.  750;  Black  v.  First  Nat.  Bank  of  West- 
minster, 96  Md.  399;  White  v.  Savage,  48  Oregon,  604;  Bankers' 
Iowa  State  Bank  v.  Mason  Lathe  Co.,  121  Iowa,  570 ;  Neal  v.  Wil- 
son, 213  Mass.  336;  Marling  v.  Jones,  138  Wis.  82;  Wilborn  v. 
Hawkins,  49  Atl.  Rep.  (R.  I.)  856. 

Debt  of  third  person. — The  statute  has  not  changed  the  rule  of 
the  common  law  that  where  one,  for  the  accommodation  of  a  debtor 
and  without  consideration,  gives  his  note  or  check  to  the  creditor 
of  the  debtor  in  payment  of,  or  as  security  for,  the  debt  due  from 
the  debtor  to  the  creditor,  he  is  liable  to  the  creditor  on  the  note 
or  check.    Neal  v.  Wilson,  213  Mass.  336.    Where  one  gives  a  check 


72  THE   NEGOTIABLE   INSTRUMENTS   LAW. 

to  a  bank  to  make  good  the  overdraft  of  another  person,  the  bank 
may  sue  on  such  check,  though  it  was  given  at  the  solicitation  of 
the  cashier.  Id. 

Paper  past  due. — The  mere  fact  that  an  accommodation  note 
was  transferred  by  the  party  accommodated  after  due,  to  a  holder 
for  value  does  not  permit  the  accommodation  maker  to  defeat  re- 
covery at  the  suit  of  a  holder  for  value  merely  upon  the  ground 
that  the  note  was  accommodation  paper,  and  without  consideration 
moving  to  the  maker.    Marling  v.  Jones,  138  Wis.  82. 

Order  of  liability.: — Accommodation  parties  to  ordinary  com- 
mercial paper  are  liable  to  each  other  in  succession  as  their  names 
appear  upon  the  instrument,  unless  they  specially  agree  that  they 
are  to  be  bound  jointly  and  not  severally,  in  which  case  they  are 
entitled  to  contribution  as  among  themselves.  Noble  v.  Breeman 
Spaulding  Co.,  65  Oregon,  93.  The  liability  of  an  accommodation 
maker  and  an  accommodation  guarantor  is  successive  and  not  con- 
current, the  liability  of  such  maker  being  primary  and  the  liability 
of  such  guarantor  secondary.  Id.  The  fact  that  the  accommoda- 
tion guarantor  knew  when  he  executed  the  guaranty  that  certain 
of  the  makers  were  accommodation  parties,  did  not,  in  the  absence 
of  a  special  agreement,  make  his  and  their  liability  concurrent  in- 
stead of  successive.  Id.  See  also  Bradley  Engineering,  etc.  Co.  v. 
Heyburn,  56  Wash.  628. 

Where  co-maker  under  disability. — An  accommodation  maker  is 
liable,  although  his  co-maker,  for  whose  accommodation  he  signed, 
successfully  pleads  his  infancy  as  a  defense.  Hodgins  v.  North- 
western Finance  Co.,  148  Pac.  Rep.  (Okl.)  717. 

Set-off. — The  statute  has  not  changed  the  rule  that  the  indorser 
of  a  promissory  note  made  as  an  accommodation  for  him  and  held 
by  a  bank  which  becomes  insolvent  before  the  note  matures,  may 
elect  to  have  such  notes  become  due  and  payable  at  once  and  set-off 
against  it  the  amount  of  his  deposit  with  the  bank.  Building  & 
Engineering  Co.  v.  Northern  Bank,  206  N.  Y.  400. 

Right  to  subrogation. — As  to  the  right  of  an  accommodation 
maker  to  subrogation,  see  Jennings  v.  Wall,  217  Mass.  278. 


NEGOTIATION.  73 

ARTICLE  IV. 

Negotiation. 

Section  30.  What  constitutes  negotiation. 

31.  How  indorsement  made. 

32.  Indorsement  must  be  of  entire  instrument. 

33.  Kinds  of  indorsement. 

34.  Special     indorsement  —  indorsement     in 

blank. 

35.  Converting  blank  indorsement  into  spe- 

cial indorsement. 

36.  When  indorsement  restrictive. 

37.  Effect  of  restrictive  indorsement — rights 

of  indorsee. 

38.  Qualified  indorsement. 

39.  Conditional  indorsement. 

40.  Indorsement    of    instrument    payable    to 

bearer. 

41.  Indorsement   where   payable   to   two    or 

more  persons. 

42.  Instrument  payable  to  cashier — To  fiscal 

officer  of  corporation. 

43.  Mistake  in  name  of  payee — form  of  in- 

dorsement. 

44.  Indorsement  in  representative  capacity. 

45.  Presumption  as  to  time  of. 

46.  Presumption  as  to  place  of. 

47.  Continuation  of  negotiable  character. 

48.  Striking  out  indorsement. 

49.  Transfer  without  indorsement — effect  of. 

50.  When  prior  party  may  negotiate  instru- 

ment. 

§  30.  What  constitutes  negotiation. — An  instrument 
is  negotiated  when  it  is  transferred  from  one  person 


74  THE   NEGOTIABLE  INSTRUMENTS   LAW. 

to  another  in  such  manner  as  to  constitute  the  trans- 
feree the  holder  thereof.  If  payable  to  bearer  it  is 
negotiated  by  delivery;  if  payable  to  order  it  is  nego- 
tiated by  the  indorsement  of  the  holder  completed  by 
delivery. 

Meaning  of  term  negotiate. — Respecting  the  meaning  of  the 
word  "  negotiated  "  as  used  in  this  section,  the  Supreme  Court  of 
Nebraska  said  in  a  late  case :  "  Negotiation  means  the  act  by  which 
a  bill  of  exchange  or  promissory  note  is  put  into  circulation  by  be- 
ing passed  by  one  of  the  original  parties  to  another  person.  If  A 
gives  B  a  check  on  C  bank,  and  B  presents  the  check  at  the  counter 
of  C,  no  negotiation  is  necessary  or  had.  He  simply  demands  and 
receives  payment;  but  if  B  goes  to  D  store  and  buys  a  bill  of  goods 
and  tenders  the  indorsed  check  in  payment,  he  negotiates  the  check. 
The  difference  is  clear  and  well  defined.  The  presentation  by  de- 
fendant of  the  check  in  controversy  for  payment,  was  not  a  '  nega- 
tiation '  of  the  check  within  the  meaning  of  the  statute  quoted.  Nor 
do  we  think  that  the  payment  by  a  bank  of  a  check  drawn  upon  it, 
constitutes  such  bank  a  '  holder '  within  the  meaning  of  the  statute." 
Aurora  State  Bank  v.  Hayes  Eames  Elevator  Co.,  88  Neb.  187, 
190.  See  also  National  Bank  of  Commerce  v.  Farmers'  &  Mer- 
chants' Bank,  87  Neb.  843;  Scotland  Co.  Nat.  Bank  v.  Hohn, 
146  Mo.  App.  699.  Where,  after  the  sale  of  a  traction  com- 
pany's property,  the  purchasers  deposited  notes  for  the  price  with 
a  bank,  and  a  cashier's  check  was  issued  payable  to  the  secretary 
of  the  traction  company,  by  whom  it  was  indorsed  to  a  trustee,  who 
indorsed  it  in  blank,  and  left  it  in  the  custody  of  the  bank  with  the 
notes:  Held,  that  the  cashier's  check  was  not  negotiated  within 
the  meaning  of  this  section.  Seaman  v.  Muir,  144  Pac.  Rep.  (Ore.) 
121. 

Place  of  indorsement. — An  indorsement  is  usually  written  on 
the  back  of  the  instrument,  but  the  place  is  not  essential.  If  the 
payee  write  his  name  on  any  part  of  the  instrument,  with  the  in- 
tention of  indorsing  it,  that  is  a  sufficient  indorsement.  Haines 
v.  Dubois,  29  N.  J.  Law,  259.    See  section  17,  subd.  6. 

Necessity  for  delivery. — The  indorsement  alone  without  delivery 
conveys  no  title.  Dann  v.  Norris,  24  Conn.  337;  Clark  v.  Sigour- 
ney,  17  Conn.  520 ;  Middleton  v.  Griffith,  57  N.  J.  Law,  442 ;  Spen- 
cer v.  Carstarphen,  15  Colo.  445. 


NEGOTIATION.  75 

Agreement  not  to  negotiate. — A  parol  agreement,  although  en- 
tered into  at  the  time  of  making  negotiable  paper,  that  the  payee 
will  not  negotiate  it  and  will  renew  it,  etc.,  is  inadmissible  to  vary 
the  effect  of  the  paper.  Benton  v.  Sikyta,  84  Neb.  808;  Heist  v. 
Hart,  73  Pa.  St.  "286.  So,  it  has  been  held  that  evidence  of  an  oral 
agreement  that  payment  was  not  to  be  called  for  until  certain  paint- 
ings of  the  maker  had  been  sold  is  an  attempt  to  vary  the  written 
contract.  Wooley  v.  Cobb,  165  Mass.  503.  See  Woods  Son  Co.  v. 
Sckaefer,  173  Mass.  443. 

Paper  payable  to  person  named  or  bearer. — By  former  statutes 
in  some  states,  notes  made  payable  to  a  person  named  therein  or 
bearer  must  have  been  indorsed  to  pass  the  legal  title.  Garvin  v. 
Wiswell,  83  111.  218 ;  Blackman  v.  Lehman,  63  Ala.  547.  The  stat- 
ute has  changed  the  law  in  those  states.  See  Davis  v.  First  Nat. 
Bank  of  Blakeley,  68  So.  Kep.  (Ala.)  261. 

Transfer  otherwise  than  by  indorsement. — It  was  not  intended 
by  this  section  to  prescribe  an  exclusive  mode  by  which  the  in- 
strument may  be  transferred;  but  merely  to  prescribe  a  mode 
by  which  the  transfer  can  be  made  so  as  to  protect  the  transferee 
against  infirmities  in  the  instrument  or  defects  in  the  title  of 
the  transferrer.  Carter  v.  Butler,  264  Mo.  306.  Hence,  where  a 
note  is  indorsed  specially  to  a  bank  it  may  be  sued  upon  by  a 
person  to  whom  it  has  been  assigned  by  a  deed  of  assignment.    Id. 

§  31.  How  indorsement  made. — The  indorsement 
must  be  written  on  the  instrument  itself  or  upon  a 
paper  attached  thereto.  The  signature  of  the  indorser, 
without  additional  words,  is  a  sufficient  indorsement. 

Variant  readings. — In  Illinois  the  following  is  added  at  the  end 
of  the  section:  "And  the  addition  of  words  of  assignment  or  of 
guaranty  shall  not  negative  the  additional  effect  of  the  signature 
as  an  indorsement  unless  otherwise  expressly  stated." 

Rule  at  common  law. — The  rule  as  commonly  stated  was  that 
where  there  is  not  room  on  the  bill,  the  indorsement  may  be  on  an 
allonge.  But  it  is  not  necessary  that  there  should  be  a  physical 
impossibility  of  writing  the  indorsement  on  the  instrument  itself; 
it  may  be  on  an  allonge,  whenever  the  necessity  or  convenience  of 
the  parties  requires  it.     See  Folger  v.  Chase,  18  Pick.  63 ;  Crosby  v. 


7G  THE   NEGOTIABLE  INSTRUMENTS  LAW. 

Roub,  16  Wis.  616;  French  v.  Turner,  15  Ind.  50.  Besides,  any- 
such  statement  of  the  rule  would  give  rise  to  a  question  of  fact 
which  might  be  determined  variously.  But  see  Bishop  v.  Chase, 
156  Mo.  158;  Franklin  v.  Twogood,  18  Iowa,  515;  Peach  v.  Bligh, 
37  111.  317;  Haskell  v.  Brown,  65  111.  29;  Wall  v.  Hollenbeck,  19 
Neb.  639.  For  a  case  applying  the  statute,  see  First  Nat.  Bank 
v.  Bickel,  143  Ky.  757. 

Signature  without  more — Assignment. — The  signature  of  the  in- 
dorser  without  more  is  the  customary  and  mercantile  form  of  in- 
dorsement. But  an  indorsement  of  a  promissory  note  as  follows: 
"  For  value  received,  I  hereby  assign,  transfer  and  set  over  to  B 
all  my  right,  title,  interest  and  claim  in  the  within  note,"  has  been 
held  to  pass  a  legal  title  to  the  same,  and  not  to  destroy  its  nego- 
tiability. Hall  v.  Toby,  110  Pa.  St.  318,  see  also  Thorp  v.  Minde- 
man,  123  Wis.  149.  So,  where  the  transfer  was  in  the  following 
form:  "  I  Hear  By  assine  this  note  over  to  E.  H.  Farnsworth, 
this  the  Nov.  1st,  1910."  Farnsworth  v.  Burdick,  94  Kans.  749. 
But  see  Craig  v.  Palo  Alto  Stock  Farm,  16  Idaho,  701.  The  words 
"  for  value  received  I  hereby  guarantee  payment  of  the  within 
note  and  waive  demand  and  notice  of  protest  on  same  when  due  " 
written  on  the  back  of  a  note  by  the  payee,  do  not  constitute  an 
indorsement  and  transfer  in  due  course,  but  constitute  a  mere 
guaranty  of  payment.    Ireland  v.  Floyd,  42  Okla.  609. 

Endorsement  by  stamp. — The  name  of  the  drawee  stamped  on 
the  back  of  a  draft  with  a  rubber  stamp,  by  one  having  authority 
to  do  so,  and  with  intent  to  indorse  it,  is  a  valid  indorsement,  but 
does  not  prove  itself.  Mayers  v.  McRimmon,  140  N.  C.  640.  And 
the  transferee,  having  possession  under  such  an  indorsement,  is 
deemed  prima  facie  a  holder  in  due  course.  Evans  v.  Freeman, 
142  N.  C.  61. 

Burden  of  proof  as  to  signature. — Under  the  statute,  as  at  com- 
mon law,  the  holder  has  the  burden  of  proving  the  genuineness  of 
each  indorsement  necessary  to  his  title.  Hathaway  v.  County  of 
Delaware,  185  N.  Y.  374;  Marks  v.  Munson,  149  Pac.  Rep.  (Colo.) 
440.  But  in  some  states  the  possession  of  the  instrument  is,  by 
other  statutes,  made  presumptive  evidence  of  the  genuineness  of 
the  signatures  thereon.  See,  for  example,  Murphy  v.  Skinner's  Es- 
tate, 160  Wis.  554. 


NEGOTIATION.  77 

§  32.  Indorsement  must  be  of  entire  instrument. — 
The  indorsement  must  be  an  indorsement  of  the  entire 
instrument.  An  indorsement  which  purports  to  trans- 
fer to  the  indorsee  a  part  only  of  the  amount  payable, 
or  which  purports  to  transfer  the  instrument  to  two  or 
more  indorsees  severally,  does  not  operate  as  a  nego- 
tiation of  the  instrument.  But  where  the  instrument 
has  been  paid  in  part,  it  may  be  indorsed  as  to  the  resi- 
due. 

Transfer  of  part  interest. — For  example,  where  a  note  for  $500 
was  indorsed,  "  Pay  to  L  four  hundred  dollars  out  of  this  note,"  it 
was  held  L  could  not  recover  from  the  maker.  Lindsay  v.  Price, 
33  Tex.  282.  Where  the  plaintiff  alleged  in  his  complaint  that  the 
payee  had  indorsed  to  the  plaintiff  a  one-half  interest  in  the  note, 
it  was  held  that  the  complaint  failed  to  state  a  cause  of  action  at 
law.    Barkley  v.  Muller,  164  App.  Div.  (N.  Y.)  35. 

Partial  payment. — The  indorsement  of  a  partial  payment  on 
the  instrument  does  not  render  it  non-negotiable.  Smith  v.  Shippey, 
182  Pa.  St.  24. 

§  33.  Kinds  of  indorsement. — An  indorsement  may 
be  either  special  or  in  blank;  and  it  may  also  be  either 
restrictive  or  qualified,  or  conditional. 

§  34.  Special  indorsement — indorsement  in  blank. — 

A  special  indorsement  specifies  the  person  to  whom, 
or  to  whose  order  the  instrument  is  to  be  payable;  and 
the  indorsement  of  such  indorsee  is  necessary  to  the 
further  negotiation  of  the  instrument.  An  indorse- 
ment in  blank  specifies  no  indorsee,  and  an  instrument 
so  indorsed  is  payable  to  bearer,  and  may  be  negotiated 
by  delivery. 

Variant  readings. — In  Wyoming  the  word  "  made  "  is  inserted 
between  the  words  "  be  "  and  "  payable."  In  Massachusetts  the 
words  "  does  not  specify  any  indorsee  "  are  substituted  for  the 
words  "  specifies  no  indorsee." 


78  THE  NEGOTIABLE   INSTRUMENTS  LAW. 

Parol  evidence. — The  legal  effect  of  an  indorsement  in  blank 
may  not  be  varied  by  parol.    Torbert  v.  Montague,  38  Colo.  325. 

§  35.  Converting  blank  indorsement  into  special  in- 
dorsement.— The  holder  may  convert  a  blank  indorse- 
ment into  a  special  indorsement  by  writing  over  the 
signature  of  the  indorser  in  blank  any  contract  con- 
sistent with  the  character  of  the  indorsement. 

Rule  at  common  law. — The  section  makes  no  change  in  the  law. 
See  Beckwith  v.  Angell,  6  Conn.  317. 

Special  indorsement — Guaranty. — Thus,  he  might  write  over  the 
blank  indorsement  a  special  indorsement  to  himself,  or  to  some 
other  person.  But  he  could  not  write  over  it  a  contract  of  guar- 
anty; for  the  effect  of  this  would  be  to  deprive  the  indorser  of  his 
right  to  notice  in  case  of  non-payment.  Belden  v.  Hann,  61  Iowa, 
42.  Such  a  contract  would  be  inconsistent  with  the  character  of 
the  indorsement. 

§  36.  When  indorsement  restrictive. — An  indorse- 
ment is  restrictive,  which  either: 

1.  Prohibits  the  further  negotiation  of  the  instru- 
ment; or 

2.  Constitutes  the  indorsee  the  agent  of  the  indorser -r 
or 

3.  Vests  the  title  in  the  indorsee  in  trust  for  or  to 
the  use  of  some  other  person. 

But  the  mere  absence  of  words  implying  power  to 
negotiate  does  not  make  an  indorsement  restrictive. 

Variant  readings. — In  Montana  the  word  "  future  "  is  substi- 
tuted for  "  further  "  in  subdivision  one.  This  is  doubtless  an 
error  in  engrossing,  and  not  an  intentional  change. 

Restriction  upon  further  negotiation. — "Pay  Bank  of  A  only" 
would  be  such  an  indorsement  as  is  meant  in  subdivision  one  of  this 
section. 

Indorsement  for  collection. — The  most  frequent  instance  of  this 
is  the  indorsement  "  for  collection."     Such  indorsement   does  not 


NEGOTIATION.  79 

t 

transfer  the  title  to  the  indorsee,  but  constitutes  him  merely  an 
agent  to  present  the  paper,  and  receive  payment  thereof  for  the  ac- 
count of  the  owner.  Commercial  National  Bank  v.  Armstrong,  148 
TJ.  S.  50;  National  Butchers'  and  Drovers'  Bank  v.  Hubbell,  117 
N.  Y.  384;  Armstrong  v.  National  Bank  of  Boyertown,  90  Ivy.  431; 
Freeman's  Bank  v.  National  Tube  Works,  151  Mass.  413;  Sweeney 
v.  Easter,  1  Wall.  173;  Commercial  National  Bank  v.  Hamilton 
National  Bank,  42  Bed.  Bep.  880;  City  Bank  of  Sherman  v.  Weiss, 
68  Tex.  332;  Central  B.  B.  Co.  v.  First  National  Bank  of  Lynch- 
burg, 73  Ga.  384;  Bank  of  Metropolis  v.  First  National  Bank  of 
Jersey  City,  19  Fed.  Bep.  658;  Blaine  v.  Bourne,  11  B.  I.  119; 
Cecil  Bank  v.  Farmers'  Bank,  22  Md.  148;  Northwestern  National 
Bank  v.  Bank  of  Commerce,  107  Mo.  402;  Murchison  Nat.  Bank  v. 
Dunn  Oil  Mills,  150  N.  C.  718.  Where  an  indorsement  in  blank  is- 
accompanied  by  a  letter  stating  that  the  draft  is  for  "  collection 
and  credit,"  the  indorsement  and  letter  must  be  read  together,  and 
the  effect  is  to  make  the  indorsement  restrictive,  and  the  same  in 
character  as  if  the  contents  of  the  letter  had  been  incorporated 
in  the  indorsement.  Bank  of  America  v.  Waydell,  187  N.  Y.  115. 
As  to  the  liability  of  an  indorser  to  whom  the  instrument  has  been 
indorsed  "for  collection,"  see  note  to  section  66. 

Title  in  trust. — See  Lloyd  v.  Sigourney,  5  Bing.  252,  3  M.  & 
P.  229;  Sneel  v.  Prescott,  1  Atk.  245.  Blustration:  Pay  A  for 
account  of  B.  In  such  case  the  title  passes  to  A;  but  the  indorse- 
ment is  restrictive  to  the  extent  that  it  gives  notice  that  the  in- 
strument cannot  be  negotiated  by  A  for  his  own  debt,  or  for  his  own 
benefit.    Hook  v.  Pratt,  78  N.  Y.  371,  375. 

Omission  of  words  "to  order"  in  indorsement. — Thus,  if  the 
instrument  is  drawn  to  the  order  of  A,  his  indorsement  "  Pay  to  B  " 
does  not  restrict  the  further  negotiation  of  the  instrument,  though 
the  words  "  or  order "  are  not  included  in  the  indorsement.  See 
Leavitt  v.  Putnam,  3  N.  Y.  494. 

§  37.  Effect  of  restrictive  indorsement  —  rights  of 
indorsee. — A  restrictive  indorsement  confers  upon  the 
indorsee  the  right: 

1.  To  receive  payment  of  the  instrument; 

2.  To  bring  any  action  thereon  that  the  indorser 
could  bring; 


80  THE   NEGOTIABLE  INSTRUMENTS  LAW. 

3.  To  transfer  his  rights  as  such  indorsee,  where 
the  form  of  the  indorsement  authorizes  him  to  do  so. 

But  all  subsequent  indorsees  acquire  only  the  title  of 
the  first  indorsee  under  the  restrictive  indorsement. 

Variant  readings. — In  Illinois  the  following  changes  are  made: 
At  the  end  of  subdivision  two,  the  following  is  added:  "  Except 
in  the  ease  of  a  restrictive  indorsement  specified  in  section  36, 
sub-section  2,  any  action  against  the  indorser  or  any  prior  party 
that  a  special  indorsee  would  be  entitled  to  bring."  In  subdivision 
three  the  word  "  instrument  "  is  substituted  for  the  words  "  his 
rights  as  such  indorsee;"  and  at  the  end  of  the  section  the  fol- 
lowing is  added:  "  specified  in  section  36,  sub-section  1,  and  as 
against  the  principal  or  cestui  que  trust  only  the  title  of  the  first 
indorsee  under  the  restrictive  indorsements  specified  in  section  36 
and  sub-sections  2  and  3  respectively." 

Action  by  indorsee. — Statute  applied  in  Smith  v.  Bayer,  46  Ore. 
113;  Schmidt  v.  Pegg,  172  Mich.  160;  Craig  v.  Palo  Alto  Stock 
Farm,  16  Idaho,  701.    See  also  Gleason  v.  Thayer,  87  Conn.  218. 

Paper  indorsed  for  collection. — The  statute  enables  a  bank  to 
sue  in  its  own  name  on  paper  indorsed  to  it  "for  collection." 
Metzger  v.  Sigall,  83  Wash.  80.  As  to  whether  this  could  be 
done  before  the  statute  there  was  some  conflict  in  the  authori- 
ties. The  right  is  sustained  by  Wilson  v.  Tolson,  79  Ga.  137; 
Cummings  v.  Kohn,  12  Mo.  App.  585;  Wintermute  v.  Torrent, 
83  Mich.  555;  Regina  Flour  Mill  Co.  v.  Holmes,  156  Mass.  11; 
Spofford  v.  Norton,  126  Mass.  333;  Whiten  v.  Hayden,  9  Allen, 
408;  Roberts  v.  Parrish,  17  Oregon,  583;  McDaniel  v.  Pressler,  3 
Wash.  636;  Ward  v.  Tyler,  52  Pa.  St.  393.  But  in  Rock  County 
National  Bank  v.  Hollister,  21  Minn.  385,  it  was  held  that  the  pro- 
visions of  the  Code  requiring  the  action  to  be  brought  in  the  name 
of  the  real  party  in  interest  would  prevent  an  indorsee  to  whom  the 
instrument  was  indorsed  "for  collection"  from  maintaining  the 
action.  a 

Equities  of  prior  parties.— The  restrictive  indorsee  takes  the 
paper  subject  to  all  equities  that  might  have  been  asserted  by  the 
principal  obligor  had  it  not  been  indorsed.  Smith  v.  Bayer,  46 
Oregon,  143. 


NEGOTIATION.  81 

§  38.  Qualified  indorsement. — A  qualified  indorse- 
ment constitutes  the  indorser  a  mere  assignor  of  the 
title  to  the  instrument.  It  may  be  made  by  adding  to 
the  indorser 's  signature  the  words  "without  recourse" 
or  any  words  of  similar  import.  Such  an  indorsement 
does  not  impair  the  negotiable  character  of  the  instru- 
ment. 

How  qualified  indorsement  made. — See  Grant  v.  Fleming,  46 
Pa.  St.  140;  Cowles  v.  Harts,  3  Conn.  522.  But  the  words  em- 
ployed must  clearly  indicate  that  the  indorser  intends  to  disclaim 
liability.  Fassin  v.  Hubbard,  55  N.  Y.  470.  Hence,  where  the 
payee  wrote  above  his  signature  an   assignment  in  the  following 

form,  "  I  hereby  assign  the  within  note  to  ,"  Held,  that  this 

did  not  relieve  him  from  liability  as  indorser.  Markey  v.  Casey, 
108  Mich.  184.  An  indorsement  "  without  recourse  and  without 
warranty  of  any  character,"  is  a  qualified  indorsement  within  the 
meaning  of  this  section.    Schmidt  v.  Pegg,  172  Mich.  160. 

Parol  evidence. — The  words  "without  recourse"  following  the 
name  of  the  first,  and  preceding  the  name  of  a  second,  indorser 
may,  as  between  them,  be  shown  by  parol  evidence  to  apply  to  the 
former  instead  of  to  the  latter.  Corbett  v.  Fetzer,  47  Neb.  269; 
Goolrick  v.  Wallace,  154  Ky.  596.  And  this  although  the  second 
indorsee  took  it  without  knowing  that  the  limitation  was  applicable 
to  the  first  indorser.    Fitchburg  Bank  v.  Greenwood,  2  Allen,  434. 

Effect  as  to  negotiability. — A  qualified  indorsement  in  no  re- 
spects affects  the  negotiability  of  the  instrument,  but  simply  quali- 
fies the  duties,  obligations  and  responsibilities  of  the  indorser  re- 
sulting from  the  general  principles  of  the  law.  Stewart  v.  Pres- 
ton, 1  Fla.  10,  22.  And  whatever  interest  would  pass  by  a  general 
or  full  indorsement  will  pass  by  a  qualified  indorsement.  Stewart 
v.  Preston,  1  Fla.  10,  22;  Epler  v.  Funk,  8  Pa.  St.  468.  The  pro- 
vision of  this  section,  that  a  restrictive  indorsement  does  not  im- 
pair the  negotiable  character  of  the  instrument,  applied  in  Elgin 
City  Banking  Co.  v.  Hall,  119  Tenn.  548;  Leavitt  v.  Thurston,  38 
Utah,  351;  Page  v.  Ford,  65  Oregon,  450;  Bank  of  Sampson  v. 
Hatcher,  151  N.  C.  359. 
6 


82  THE  NEGOTIABLE  INSTRUMENTS  LAW. 

Indorsement  in  blank. — If  the  indorsement  is  in  blank,  without 
recourse,  any  subsequent  holder  is  authorized  to  fill  up  the  blank 
with  his  own  name  as  indorsee.     Lyon  v.  Ewings,  17  Wis.  61. 

Equities  of  prior  parties. — A  qualified  indorsement  is  not  such 
a  departure  from  the  usual  course  of  business  as  to  put  the  trans- 
feree on  inquiry  as  to  the  equities  between  the  original  parties. 
Bisbing  v.  Graham,  14  Pa.  St.  14;  Lomax  v.  Picot,  2  Kand,  260. 
And  this  is  so,  though  the  words  without  recourse  are  added  to  an 
indorsement  in  the  following  form :  "  For  value  received  I  hereby 
sell,  transfer  and  assign  the  within  note."  Thorp  v.  Mindeman,  123 
Wis.  140  (a  case  arising  under  the  statute).    See  note  to  section  56. 

§  39.  Conditional  indorsement. — Where  an  indorse- 
ment is  conditional,  a  party  required  to  pay  the  in- 
strument may  disregard  the  condition  and  make  pay- 
ment to  the  indorsee  or  his  transferee,  whether  the 
condition  has  been  fulfilled  or  not.  But  any  person  to 
whom  an  instrument  so  indorsed  is  negotiated  will  hold 
the  same,  or  the  proceeds  thereof,  subject  to  the  rights 
of  the  person  indorsing  conditionally. 

Rule  at  common  law. — The  first  sentence  is  the  same  as  section 
33  of  the  English  Bills  of  Exchange  Act  with  a  slight  modifica- 
tion. In  his  note  to  that  section  Judge  Chalmers  says:  "This 
section  alters  the  law.  It  was  formerly  held  that  if  a  bill  was 
indorsed  conditionally,  the  acceptor  paid  it  at  his  peril  if  the 
condition  was  not  fulfilled.  This  was  hard  on  him.  If  he  dishon- 
ored the  bill  he  might  be  liable  to  damages,  and  yet  it  might  be 
impossible  for  him  to  find  out  if  the  conditions  had  been  ful- 
filled." See  Daniel  on  Neg.  Inst.,  sections  697,  698a.  There  ap- 
pear to  be  no  American  cases  upon  the  subject;  and  the  only 
English  case  is  Robertson  v.  Kensington,  4  Taunt.  30. 

Title  to  paper  or  proceeds. — The  rule  adopted  in  the  last  sen- 
tence of  this  section  is  somewhat  analogous  to  that  which  gives 
to  an  indorser  who  has  paid  a  note  in  part  an  equitable  right 
•pro  tanto  in  the  proceeds,  where  the  holder  afterward  collects  the 
whole  amount  of  the  note  from  the  maker.  See  Madison  Square 
Bank  v.  Pierce,  137  N.  Y.  444. 


NEGOTIATION.  83 

§  40.  Indorsement  of  instrument  payable  to  bearer. 
— Where  an  instrument,  payable  to  bearer,  is  indorsed 
specially,  it  may  nevertheless  be  further  negotiated 
by  delivery;  but  the  person  indorsing  specially  is  liable 
as  indorser  to  only  such  holders  as  make  title  through 
his  indorsement. 

Variant  readings. — In  Illinois  the  section  reads:  "  Where  an 
instrument  originally  payable  to  and  indorsed  specially  to  bearer 
is  subsequently  indorsed  specially,  it  may,"  etc.  But  there  seems 
to  be  some  confusion  here;  for  by  the  express  provision  of  section 
34,  a  "special"  indorsement  "specifies  the  person  to  whom,  or 
to  whose  order  the  instrument  is  payable,"  and  under  the  act,  as 
under  the  Law  Merchant,  there  can  be  no  such  thing  as  an  instru- 
ment "  indorsed  specially  to  bearer." 

Rule  of  the  law  merchant. — This  section  makes  no  change  in 
the  law.  See  Johnson  v.  Mitchell,  50  Tex.  212;  Smith  v.  Clarke, 
Peake,  225;  Mitchell  v.  Fuller,  15  Pa.  St.  268;  Daniel  on  Neg. 
Inst.,  sections  663a,  696. 

Instrument  payable  to  specified  person  or  bearer. — A  check 
payable  to  a  certain  named  person,  or  bearer,  need  not  be  in- 
dorsed, nor  need  the  holder  thereof  be  identified;  and  a  bank 
paying  such  check  without  identification  of  the  holder  is  not 
negligent,  though  the  bank,  in  compliance  with  its  custom,  re- 
quired it  to  be  indorsed.  Farmers  &  Merchants'  Bank  v.  Bank 
of  Rutherford,  115  Tenn.  64. 

Reason  for  the  rule. — The  rule  adopted  in  this  section  may  be 
inconvenient  in  practice  at  times,  as,  for  example,  when  paper 
drawn  payable  to  bearer  is  sent  through  the  mail.  But  to  permit 
the  holder  to  make  the  instrument  payable  to  a  specified  person, 
or  to  his  order,  would  be  to  allow  him  to  vary  the  contract  of  the 
acceptor  or  maker.  Thus,  if  A  makes  his  note  payable  to  B  or 
bearer,  he  does  not  assume  the  obligation  of  seeing  that  the  instru- 
ment is  properly  indorsed ;  and  upon  no  rational  legal  theory  should 
it  be  in  the  power  of  the  holder  to  impose  upon  him  a  duty  which, 
by  the  express  terms  of  his  contract,  he  refused  to  take  upon  him- 
self. 

Where  paper  is  indorsed  in  blank. — The  section  cannot  apply 
where  the  paper  is  originally  made  payable  to  order  and  indorsed 


84  THE   NEGOTIABLE  INSTRUMENTS   LAW. 

in  blank;  for  by  section  9  a  note  or  bill  which,. upon  its  face,  is 
payable  to  order,  becomes  payable  to  bearer  only  when  the  last 
indorsement  is  in  blank;  and  hence,  when  a  blank  indorsement  is 
followed  by  a  special  indorsement  the  instrument  is  not  within 
the  terms  of  section  9.  Thus,  if  a  check  drawn  to  the  order  of 
A  is  indorsed  in  blank  by  the  payee,  and  delivered  to  B,  and  B 
indorses  it  to  the  order  of  C,  it  is  not  payable  to  bearer,  for  the 
reason  that  the  last  indorsement,  which  by  section  9  is  made  the 
test,  is  a  special  indorsement.  The  reason  for  making  a  distinc- 
tion in  this  respect  between  instruments  originally  drawn  payable 
to  bearer  and  instruments  which  have  become  so  payable  because 
indorsed  in  blank  is  obvious.  In  the  one  case,  the  maker  or  drawer 
has  expressly  provided  that  the  instrument  shall  be  payable  to 
bearer,  and  it  cannot  be  made  payable  to  order  without  modifying 
these  terms.  But  where,  upon  its  face,  it  is  payable  to  order,  a 
transferee,  taking  under  a  blank  indorsement,  does  not,  by  indors- 
ing it  specially,  change  its  tenor  as  originally  drawn. 

§  41.  Indorsement  where  payable  to  two  or  more  per- 
sons.— Where  an  instrument  is  payable  to  the  order 
of  two  or  more  payees  or  indorsees  who  are  not  part- 
ners, all  must  indorse,  unless  the  one  indorsing  has 
authority  to  indorse  for  the  others. 

Variant  readings.— In  Wisconsin  the  word  "  joint  "  is  inter- 
polated after  the  word  "  or  "  and  before  the  word  "  indorsees." 

Rule  at  common  law. — This  section  makes  no  change  in  the  law. 
The  settled  rule  of  the  law  merchant  was  that  co-payees,  not 
partners,  must  each  indorse,  in  order  to  negotiate  the  paper. 
Willis  v.  Green,  5  Hill.  233;  Foster  v.  Hill,  36  N.  H.  526;  Bennett 
v.  McGaughy,  4  Miss.  192 ;  Wood  v.  Wood,  16  N.  J.  L.  428 ;  Smith 
v.  Whiting,  9  Mass.  334;  Ryhiner  v.  Feickert,  92  111.  305;  Allen 
v.  Corn  Exchange  Bank,  87  App.  Div.  (N.  Y.)  335.  For  cases 
arising  under  the  statute,  see  First  Nat.  Bank  v.  Gridley,  112 
App.  Div.  (N.  Y.)  398;  Martz  v.  State  Nat.  Bank,  147  App.  Div. 
(N.  Y.)  250. 

§  42.  Instrument  payable  to  cashier  —  to  fiscal  offi- 
cer of  corporation. — Where  an  instrument  is  drawn  or 


NEGOTIATION.  85 

indorsed  to  a  person  as  "cashier"  or  other  fiscal  of- 
ficer of  a  bank  or  corporation,  it  is  deemed  prima  facie 
to  be  payable  to  the  bank  or  corporation  of  which  he 
is  such  officer;  and  may  be  negotiated  by  either  the 
indorsement  of  the  bank  or  corporation,  or  the  indorse- 
ment of  the  officer. 

Variant  reading. — In  South  Dakota  the  words  "the  indorse- 
ment of  "  before  the  words  "  the  bank  or  corporation  "  near  the 
end  of  the  section  are  omitted. 

Indorsement  to  cashier. — It  is  common  practice  for  banks  to 
indorse  in  this  way  paper  remitted  for  collection.  The  rule 
adopted  in  the  act,  so  far  as  it  relates  to  indorsements  to  cashiers 
of  banks,  was  well  established.  See  Bank  of  the  State  v.  Mus- 
kingum Bank,  29  N.  Y.  619;  First  Nat.  Bank  v.  Hall,  44  N.  Y. 
395;  Bank  of  Genesee  v.  Patchin  Bank,  19  N.  Y.  312;  Folger  v. 
Chase,  18  Pick.  63;  Farmers',  etc.,  Bank  v.  Troy  City  Bank,  1 
Dough.  (Mich.)  457;  Watervliet  Bank  v.  White,  1  Denio,  608; 
Lookout  Bank  v.  Aull,  93  Tenn.  645.  Under  this  section  it  is 
competent  in  an  action  on  a  certificate  of  deposit  made  payable 
to  S  as  cashier  of  a  bank,  and  indorsed  by  him  as  cashier,  to 
show  that  he  was  the  cashier  of  such  bank,  and  was  acting  in 
that  capacity  in  transferring  the  certificate.  Johnson  v.  Buffalo 
Center  State  Bank,  134  Iowa,  731.  And  it  is  not  competent  for  the 
bank,  for  the  purpose  of  showing  that  the  bank  was  not  bound  by 
this  act,  to  prove  that  S  was  making  use  of  his  official  title  and 
authority  in  his  individual  interest.  (Id.)  The  provisions  of 
this  section  do  not  apply  where  the  cashier's  individual 
name  is  used  without  the  title  of  his  office.  First  Nat.  Bank  of 
Pomeroy  v.  McCullough,  50  Oregon,  508.  And  the  mere  posses- 
sion by  a  bank  of  notes  payable  to  its  cashier  in  his  individual 
name  does  not  enable  it  to  maintain  an  action  thereon  against 
the  maker.  Swanby  v.  Northern  State  Bank,  150  Wis.  572.  For 
cases  applying  the  statute,  see  Griffin  v.  Erskine,  131  Iowa,  444, 
450-451;  Craig  v.  Palo  Alto  Stock  Farm,  16  Idaho,  701. 

Fiscal  officers  of  other  corporations. — The  commissioners  deemed 
it  wise  to  extend  the  rule  to  all  fiscal  officers  of  corporations. 
Under  this  provision  an  indorsement  to  the  treasurer  of  a  savings 
bank  would  make  the  paper  payable  to  the  bank.     So  of  an  in- 


86  THE   NEGOTIABLE   INSTRUMENTS   LAW. 

dorsement  to  the  treasurer  or  secretary  of  a  trust  company.  A 
check  payable  to  the  order  of  "Treas.  of  Town  of  Farmingham" 
is  in  legal  effect  payable  to  the  town.  Quincy  Mut.  Fire  Ins.  Co. 
v.  International  Trust  Co.,  217  Mass.  370. 

§  43.  Mistake  in  name  of  payee  —  form  of  indorse- 
ment.— Where  the  name  of  a  payee  or  indorsee  is 
wrongly  designated  or  misspelled,  he  may  indorse  the 
instrument  as  therein  described,  adding,  if  he  think 
fit,  his  proper  signature. 

Name  assumed  in  business. — Thus,  one  who,  while  carrying  on 
business  on  his  own  account  in  the  name  of  a  company  which  has 
been  incorporated,  but  not  organized,  receives  in  payment  of  a 
debt  contracted  with  him  in  such  business  a  promissory  note 
payable  to  the  order  of  the  corporation,  may  transfer  the  note 
by  indorsing  it  in  his  own  name.  Bryant  v.  Eastman,  7  Cusb. 
111.  Conversely,  a  man  will  be  bound  by  paper  made  by  him  in 
the  name  he  adopts  in  his  business.  Salmon  v.  Hopkins,  61  Conn. 
47. 

§  44.  Indorsement  in  representative  capacity. — 
Where  any  person  is  under  obligation  to  indorse  in  a 
representative  capacity,  he  may  indorse  in  such  terms 
as  to  negative  personal  liability. 

When  personal  liability  negatived. — For  a  case  applying  the 
statute,  see  Chelsea  Exchange  Bank  v.  First  U.  P.  Church,  89  Misc. 
(N.  Y.)  616.  In  this  case  persons  who  indorsed  as  the  financial 
committee  of  a  church  were  held  not  to  be  bound  personally. 

Indorsement  by  personal  representatives. — As  to  the  liability  of 
executors  and  administrators  who  accept  or  indorse,  see  Schmittler 
v.  Simon,  101  N.  Y.  554. 

§  45.  Presumption  as  to  time  of. — Except  where  an 
indorsement  bears  date  after  the  maturity  of  the  in- 
strument every  negotiation  is  deemed  prima  facie  to 
have  been  effected  before  the  instrument  was  overdue. 


NEGOTIATION.  87 

Rule  at  common  law — Burden  of  proof. — The  rule  adopted  in 
this  section  prevailed  at  common  law.  See  Mason  v.  Noonan,  7 
Wis.  609.  If  the  defendant  alleges  that  the  paper  was  indorsed 
after  it  was  due,  the  burden  of  proof  is  on  him  to  show  it.  White 
v.  Camp,  1  Fla.  94.  This  rule  is  important  because  that,  in  order 
to  constitute  one  a  holder  in  due  course,  he  must  have  taken  the 
instrument  before  it  was  overdue.  See  section  52.  The  indorse- 
ment of  an  overdue  note  cannot  relate  back  to  the  date  of  the 
note;  as  a  new  and  independent  contract,  it  takes  effect  from 
the  time  it  is  made,  and  must  be  determined  by  the  laws  then  in 
force  and  the  circumstances  then  existing.  Brown  v.  Hull,  33 
Gratt.  23,  30.  For  a  case  apphring  the  statute,  see  Cedar  Rapids 
Nat.  Bank  v.  Bashara,  39  Okla.  482. 

§  46.  Presumption  as  to  place  of. — Except  where  the 
contrary  appears,  every  indorsement  is  presumed 
prima  facie  to  have  been  made  at  the  place  where  the 
instrument  is  dated. 

Importance  of  presumption — Illustrations. — As  an  indorsement 
is  not  merely  a  transfer  of  the  instrument,  but  is  a  new  and  sub- 
stantive contract  embodying  in  itself  all  the  terms  of  the  instru- 
ment, the  place  where  it  was  made  often  becomes  of  importance. 
See  Ingalls  v.  Lee,  9  Barb.  647;  Brown  v.  Hull,  33  Gratt,  27,  29; 
Smith  v.  Caro,  9  Oregon  278;  Bank  of  British  N.  Am.  v.  Ellis, 
6  Sawyer,  98;  Freese  v.  Brownell,  35  N.  J.  Law,  2S5.  For  example, 
an  indorsement  in  Massachusetts  of  a  note  executed  and  payable  in 
New  York  is  a  Massachusetts  contract  and  governed  by  the  law 
of  that  state.  Glidden  v.  Chamberlin,  167  Mass.  486.  An  in- 
dorsement in  blank  of  a  promissory  note  dated  and  payable  in 
the  State  of  New  York  is  presumed,  both  at  common  law  and  under 
the  statute,  to  have  been  made  here,  and  one  discounting  the  note 
in  good  faith  is  entitled  to  rely  upon  that  presumption.  Chemical 
Nat.  Bank  v.  Kellogg,  183  N.  Y.  92.  Where  a  married  woman,  at 
her  residence  in  New  Jersey,  indorsed  in  blank,  for  her  husband's 
benefit,  his  promissory  note,  dated  and  payable  in  New  York, 
where  it  was  discounted  in  good  faith,  without  notice  that  the  in- 
dorser  was  a  non-resident,  or  that  the  indorsement  was  made  in 
another  state:  Held,  that  she  was  estopped  to  deny  that  her  in- 
dorsement was  a  New  York  contract,  and  from  claiming  that  it 
was  a  New  Jersey  contract.     (Id.) 


88  THE   NEGOTIABLE   INSTRUMENTS  LAW. 

Place  where  note  made. — In  the  absence  of  evidence  to  the 
contrary  a  note  is  presumed  to  have  been  made  at  the  place  where 
it  bears  date.    Finch  v.  Calkins,  183  Mich.  298. 

§  47.  Continuation  of  negotiable  character. — An  in- 
strument negotiable  in  its  origin  continues  to  be  nego- 
tiable until  it  has  been  restrictively  indorsed  or  dis- 
charged by  payment  or  otherwise. 

Rule  at  common  law. — This  section  does  not  change  the  law.  See 
Cumberland  Bank  v.  Hann,  3  Harr.  (N.  J.)  222.  The  law 
was  perfectly  well  settled  that  a  note  or  bill  negotiable  in  form  is 
negotiable  as  well  after  as  before  it  becomes  due.  National  Bank 
of  Washington  v.  Texas,  20  Wall.  72;  McSherry  v.  Brooks,  46  Md. 
103,  118 ;  French  v.  Jarvis,  29  Conn.  347 ;  Adair  v.  Lenox,  15  Ore- 
gon, 489. 

Rights  and  liabilities  of  the  parties. — But  the  rights,  duties  and 
obligations  of  the  parties  are  by  no  means  the  same.  The  instru- 
ment becomes,  according  to  legal  effect,  payable  on  demand,  so  far 
as  the  indorser  is  concerned;  and  presentment  for  payment  must 
be  made  within  a  reasonable  time,  and  due  notice  of  dishonor 
given  to  the  indorser.  Brown  v.  Hull,  33  Gratt.  23,  28;  Berry  v. 
Robinson,  9  Johns.  121;  Van  Hoosen  v.  Van  Alstyne,  3  Wend.  79; 
Poole  v.  Tolleson,  1  McCord,  200;  Patterson  v.  Todd,  18  Pa.  St. 
426;  Rosson  v.  Carroll,  90  Tenn.  90.  But  if  the  paper  was  pre- 
sented at  maturity  and  notice  of  dishonor  given  to  prior  parties, 
it  is  not  necessary  that  the  indorsee  after  maturity  should  again 
present  the  paper  and  give  them  notice  of  dishonor;  for  the  origi- 
nal demand  and  notice  were  to  the  benefit  of  all  subsequent  hold- 
ers. French  v.  Jarvis,  29  Conn.  347.  As  to  the  discharge  of  nego- 
tiable instruments,  see  sections  119-125. 

§  48.  Striking  out  indorsement. — The  holder  may 
at  any  time  strike  out  any  indorsement  which  is  not 
necessary  to  his  title.  The  indorser  whose  indorse- 
ment is  struck  out,  and  all  indorsers  subsequent  to 
him,  are  thereby  relieved  from  liability  on  the  instru- 
ment. 


NEGOTIATION.  81) 

Variant  reading. — In  Kentucky  the  word  "  owner  "  is  substi- 
tuted foi*  "  holder."  If  this  is  not  merely  an  error  in  engrossing, 
the  reason  for  the  change  would  be  difficult  to  understand.  For 
while  "  holder  "  has  a  clear  and  well-defined  meaning,  when  used 
with  respect  to  commercial  paper,  the  word  "  owner,"  when  so 
used,  is  one  of  those  inexact  terms  which  cause  confusion. 

Kule  at  common  law. — This  section  is  declaratory  of  the  law  as 
it  existed  prior  to  the  enactment  of  the  statute.  Jerman  v.  Ed- 
wards, 29  App.  Cases  D.  C.  535. 

Where  paper  has  been  indorsed  in  blank. — The  holder  may  strike 
out  all  intervening  indorsements,  and  aver  that  the  first  blank  in- 
dorser  indorsed  immediately  to  himself.  New  Haven  Mfg.  Co.  v. 
New  Haven  Pulp  &  Board  Co.,  76  Conn.  126,  131-132;  Byles  on 
Bills,  149;  Preston  v.  Mann,  25  Conn.  127;  Bank  of  America  v. 
Senior,  11  E.  I.  376. 

Striking  out  indorsements  at  trial. — Intervening  indorsements 
may  be  struck  out  at  the  trial,  and  after  the  plaintiff  has  finished 
his  case.  Ensign  v.  Fogg,  177  Mich.  317;  Mayer  v.  Jadis,  1  M. 
&  Rob.  247.  See  also  Morris  v.  Cude,  57  Tex.  337;  Rand  v.  Dovey, 
83  Pa.  St.  281;  Merz  v.  Kaiser,  20  La.  Ann.  379;  Vanarsdale  v. 
Hax,  107  Fed.  Rep.  878.  And  it  is  immaterial  that  an  intermediate 
indorsement  is  restrictive.  Jerman  v.  Edwards,  29  App.  Cases 
D.  C.  535. 

Presumption  of  ownership. — The  erasure  of  intermediate  in- 
dorsements does  not  destroy  the  presumption  that  the  person  in 
possession  of  paper  indorsed  in  blank  is  the  holder  thereof.  King 
v.  Bellamy,  82  Kans.  301. 

§  49.  Transfer  without  indorsement — Effect  of. — 
Where  the  holder  of  an  instrument  payable  to  his  order 
transfers  it  for  value  without  indorsing  it,  the  transfer 
vests  in  the  transferee  such  title  as  the  transferrer  had 
therein,  and  the  transferee  acquires,  in  addition,  the 
right  to  have  the  indorsement  of  the  transferrer.  But 
for  the  purpose  of  determining  whether  the  trans- 
feree is  a  holder  in  due  course,  the  negotiation  takes 
effect  as  of  the  time  when  the  indorsement  is  actually 
made. 


90  THE   NEGOTIABLE  INSTRUMENTS  LAW. 

Variant  readings. — In  Alabama  the  word  "holder"  and  "said 
holder"  are  substituted  for  transferrer.    But  the  use  of  "holder" 
in  this  connection  is  confusing;  for  by  section  191  "  holder  "  is 
defined  to  mean  the  payee  or  indorsee  who  is  in  possession  of  the 
instrument,  and  where  the  transfer  is  without  indorsement  neither 
the   transferrer  nor  the   transferee   answers   to   this    description 
Nor  is  the  matter  helped  by  the  use  of  the  archaic  form  "said." 
In  Colorado  the  words  "if  omitted  by  mistake,  accident  or  fraud" 
are  added  at  the  end  of  the  first  sentence.     In  Illinois  and  Mis- 
souri, the  words  "to  have  the  indorsement  of  the  transferrer"  are 
struck  out,  and  the  following  substituted  therefor:  "to  enforce  the 
instrument  against  one  who  signed  for  the  accommodation  of  the 
transferer,  and  the  right  to  have  the  indorsement  of  the  transferer 
if  omitted  by  accident  or  mistake."    If  this  is  to  be  taken  literally. 
the   right  of  the  transferee  to  enforce  the   instrument  against   a 
prior  party  is  limited  to  cases  where  such  prior  party  has  signed 
for  the  accommodation  of  the  transferer.    The  reason  for  the  change 
does  not  seem  to  be  very   clear.     In  Wisconsin   the  following   is 
added  at   the  end  of  the   section:  "When  the  indorsement   was 
omitted  by  mistake,  or  there  was  an  agreement  to  endorse  made  at 
the  time  of  the  transfer,  the  endorsement  when  made  relates  back 
to  the  time  of  transfer."    . 

Effect  of  transfer  without  indorsement. — Under  this  section  a 
negotiable  instrument,  payable  to  the  order  of  a  person  named, 
may  be  effectually  transferred  by  mere  delivery,  and  the  assignee 
takes  the  legal  title,  and  may  sue  in  his  own  name;  but  he  takes 
subject  to  the  defenses  in  favor  of  prior  parties.     Martz  v.  State 
Nat.  Bank,  147  App.  Div.  (N.  Y.)  250;  Meuer  v.  Phoenix  Nat.  Bank, 
42  Misc.  (N.  Y.)  341 ;  Bank  of  Bromfield  v.  McKinley,  53  Colo.  279; 
Callahan  v.  Louisville  Dry  Goods  Co.,  140  Ky.  712;  Forter's  Admr. 
v.  Metcalf,  144  Ky.  385;  First  Nat.  Bank  v.  Stam,  186  Mo.  App. 
439;  Sublette  v.  Brewington,  139  Mo.  App.  410;  Carter  v.  Butler, 
264  Mo.   306;  Keifer  v.  Talbert,  128  Minn.  519;   Steinhilper  v. 
Basnight,  153  N.   C.  293;  First  Nat.  Bank  of  Pomeroy  v.  Mc- 
Cullough,  50  Oregon  508;  Landis  v.  White,  127  Tenn.  504;  Ire- 
land v.  Scharpenberg,  54  Wash.  558;  Smith  v.  Nelson,  212  Fed. 
Rep.  56.    But  under  the  statute,  as  well  as  under  the  law  mer- 
chant, the  indorsement  is  required  to  constitute  the  transferee  a 
holder  in  due  course.    Mayers  v.  McRimmon,  140  N.  C.  640,  642- 
643.     Thus,  the  purchaser  of  a  certified  check,  payable  to  order, 


NEGOTIATION.  91 

who  obtains  title  without  the  indorsement  of  the  payee,  holds  it 
subject  to  all  equities  between  the  original  parties,  although  he 
paid  full  consideration,  without  notice.  Goshen  National  Bank  v. 
Bingham,  118  N.  Y.  349;  Jenkinson  v.  Wilkinson,  110  N.  C.  532. 
And  an  intention  on  the  part  of  the  payee  and  transferee  to  have 
the  paper  indorsed  is  not  sufficient,  at  least  in  the  absence  of  an 
express  agreement  to  indorse.  It  is  the  act  of  indorsement,  not 
the  intention,  which  negotiates  the  instrument.  Goshen  National 
Bank  v.  Bingham,  supra.  Where  a  check,  drawn  to  the  order  and 
in  the  hands  of  a  bona  fide  holder  for  value,  has  at  his  request  been 
certified  by  a  bank,  and  is  a  valid  obligation  against  the  maker, 
and  there  are  no  equities  between  him  and  the  bank,  the  holder 
can  recover  of  the  bank  upon  the  check,  although  the  maker  had 
not  indorsed  it  to  him.  Meuer  v.  Phoenix  National  Bank,  42  Misc. 
(N.  Y.)  341. 

Paper  sold  under  execution. — Where  a  note  has  been  attached 
and  sold  under  execution,  the  purchaser  may  sue  thereon  without 
regard  to  whether  the  sheriff's  indorsement  to  him  was  regular  or 
irregular.     Fishburn  v.  Lauderslausen,  50  Ore.  364. 

Presumption  of  ownership. — In  Callahan  v.  Louisville  Dry  Goods 
Co.,  140  Ky.  714,  it  was  said  that,  under  the  statute,  no  indorse- 
ment is  necessary  to  invest  the  holder  with  the  presunqriion  of 
ownership,  but  possession  alone  presupposes  ownership  in  due 
course.  See  also  Roy  v.  Duff,  152  N.  W.  Rep.  (Iowa)  606.  But 
this  appears  to  be  a  misapprehension  of  the  effect  of  the  section. 
The  rule  that  possession  is  prima  facie  proof  of  ownership  applies 
only  where  the  paper  is  drawn  payable  to  bearer,  or  has  become 
so  payable  because  indorsed  in  blank;  but  where  it  is  payable  to 
order,  proof  of  the  indorsement  of  the  payee,  or  of  the  indorsee  to 
whom  it  has  been  indorsed  specially,  has  always  been  required 
(Hathaway  v.  County  of  Delaware,  185  N.  Y.  368) ;  and  certainly 
there  is  nothing  in  section  49  to  change  this  rule  of  evidence.  If 
the  holder  claims  title  under  this  section,  then,  instead  of  proving 
the  indorsement  of  the  payee  as  a  part  of  his  case,  as  he  would 
ordinarily  do,  he  should  prove  the  special  circumstances  which 
bring  the  case  within  the  section. 

Relation  back. — An  indorsement  after  notice  of  a  defense  does 
not  relate  back  to  the  transfer,  so  as  to  cut  off  intervening  rights 
and   remedies.     Meuer   v.   Phenix  Nat.   Bank,   42   Misc.    (N.   Y.) 


92  THE   NEGOTIABLE  INSTRUMENTS  LAW. 

341.  But  it  has  been  held  that  the  holder  is  protected  against 
everything  subsequent  to  delivery,  the  indorsement  being  deemed 
to  relate  back  to  the  time  of  delivery  as  to  any  equity  outside  of 
the  note  itself.    Beard  v.  Dedolph,  29  Wis.  136. 

§  50.  When  prior  party  may  negotiate  instrument. 
— Where  an  instrument  is  negotiated  back  to  a  prior 
party,  such  party  may,  subject  to  the  provisions  of  this 
act,  reissue  and  further  negotiate  the  same.  But  he  is 
not  entitled  to  enforce  payment  thereof  against  any 
intervening  party  to  whom  he  was  personally  liable. 

See  note  to  section  121. 


EIGHTS   OF   HOLDER.  93 


ARTICLE  V. 
Rights  of  Holder. 

Section  51.  Right  of  holder  to  sue — payment. 

52.  What  constitutes  a  holder  in  due  course. 

53.  Instrument  payable  on  demand — negotia- 

tiation  of — unreasonable  time. 

54.  Notice  before  full  amount  paid. 

55.  When  title  defective. 

56.  What  constitutes  notice  of  defect. 

57.  Rights  of  holder  in  due  course. 

58.  When  subject  to  original  defenses. 

59.  Presumption — Burden  of  proof. 

§  51.  Right  of  holder  to  sue — Payment. — The  holder 
of  a  negotiable  instrument  may  sue  thereon  in  his  own 
name;  and  payment  to  him  in  due  course  discharges 
the  instrument. 

Pleading. — A  complaint  in  an  action  upon  a  promissory  note 
which  in  substance  alleges  that  on  or  about  a  certain  date  the  de- 
fendant made  his  promissory  note,  whereby  he  promised  to  pay  to 
the  order  of  the  plaintiff  a  certain  sum  of  money,  on  a  certain  date, 
with  interest,  but  that  no  part  thereof  has  been  paid,  states  a 
<;ause  of  action.  First  National  Bank  v.  Stallo,  160  App.  Div. 
(N.  Y.)  702. 

Evidence  of  title. — Where  the  plaintiff  is  the  payee,  the  pro- 
duction of  the  paper  is  sufficient.  Tullis  v.  McClary,  128  Iowa, 
493;  Williams  v.  Holt,  170  Mass.  351.  And  where  the  instrument 
is  payable  to  bearer,  or,  if  payable  to  order,  is  indorsed  in  blank, 
possession  is  sufficient  evidence  of  title  on  which  to  maintain  the 
action.  Newcombe  v.  Fox,  1  App.  Div.  389;  Weber  v.  Orton,  91 
Mo.  680.  The  court  will  never  inquire  whether  he  sues  for  him- 
self or  as  trustee  for  another,  nor  into  the  right  of  possession, 
unless  on  an  allegation  of  mala  fides.    Ellicott  v.  Martin,  6  Md.  509. 


94  THE  NEGOTIABLE  INSTRUMENTS  LAW. 

And  the  prima  facie  case  made  in  favor  of  the  plaintiff  hy  his  pos- 
session of  the  instrument  can  not,  in  the  absence  of  mala  fides,  be 
rebutted  by  evidence  that  the  title  was  in  some  other  party.  (Id.) N 
See  also  Lowell  v.  Bickford,  201  Mass.  543.  As  a  general  rule, 
possession  by  the  attorney  for  a  party  is  possession  by  the  party 
himself.  Kunkel  v.  Spooner,  9  Md.  462.  But,  of  course,  the  in- 
dorsement must  be  proved;  for  the  mere  possession  by  another 
than  the  payee,  of  an  unindorsed  negotiable  note  or  bill  not  pay- 
able to  bearer,  is  not  prima  facie  evidence  of  ownership.  Hatha- 
way v.  County  of  Delaware,  185  N.  Y.  374;  Shepard  v.  Hanson,  9 
N.  D.  249;  Tyson  v.  Jayner,  139  N.  C.  69.  But  see  Callahan  v. 
Louisville  Dry  Goods  Company,  140  Ky.  712.  In  the  case  last 
cited  the  court  said:  "  Reading  these  four  sections  together,  it  is 
evident  that  the  holder  of  a  note  is  deemed  to  be  the  holder  in  due 
course,  that  is,  to  have  come  lawfully  into  possession  of  it,  and  he 
may  maintain  an  action  on  it  in  his  own  name.  No  indorsement 
is  necessary  to  invest  the  holder  with  the  presumption  of  owner- 
ship, but  possession  alone  presupposes  ownership  in  due  course, 
and  this  presumption  is  indulged  until  overcome  by  proof  sup- 
ported by  proper  plea."  See  also  Roy  v.  Duff,  152  N.  W.  Rep. 
(Iowa)  606.    But  see  note  to  section  49. 

Payments. — The  instrument  can  be  satisfied  only  by  payment  to 
the  owner  at  the  time  or  to  such  owner's  authorized  agent.  H 
the  recipient  of  the  money  is  not  actually  authorized  the  payment 
is  ineffectual,  unless  induced  by  unambiguous  direction  from  the 
owner  or  justified  by  actual  possession  of  the  note.  Marling  v. 
Mommensen,  127  Wis.  363.  The  maker  of  a  note,  in  order  to  avail 
himself  of  the  defense  of  payment  before  maturity,  must  show 
that  the  indorsee  had  prior  notice  of  the  payment.  Yenney  v. 
Central'  City  Bank,  44  Neb.  402.  But  where  the  instrument  is 
indorsed  "for  collection,"  the  payment  to  the  indorser  after  the 
transfer  is  a  good  defense,  even  against  a  claim  of  prior  beneficial 
ownership  by  the  indorsee.     Smith  v.  Bayer,  46  Ore.  143. 

T 

§  52.  What  constitutes  a  holder  in  due  course. — A 
holder  in  due  course  is  a  holder  who  has  taken  the  in- 
strument under  the  following  conditions: 

1.  That  it  is  complete  and  regular  upon  its  face; 

2.  That  he  became  the  holder  of  it  before  it  was 


RIGHTS   OF   HOLDER.  95 

overdue,  and  without  notice  that  it  had  been  previously 
dishonored,  if  such  was  the  fact; 

3.  That  he  took  it  in  good  faith  and  for  value; 

4.  That  at  the  time  it  was  negotiated  to  him  he  had 
no  notice  of  any  infirmity  in  the  instrument  or  defect 
in  the  title  of  the  person  negotiating  it. 

Variant  reading. — In  Wisconsin  the  following  is  added  at  the 
end  of  the  section :  ' '  5.  That  he  took  it  in  the  usual  course  of 
business."  This  phrase,  though  often  used  by  judges  and  law- 
yers, was  always  obscure,  and  for  that  reason,  its  omission  from 
the  statute  by  the  draftsman  was  approved  by  all  the  Commission- 
ers on  Uniform  Laws. 

Incomplete  or  irregular  instrument. — Under  this  section,  a  bank 
discounting  notes  blank  as  to  date,  amount  and  maturity,  is  not  a 
holder  in  due  course.    Hunter  v.  Allen,  127  App.  Div.  (N.  Y.)  572. 

Where  a  note  recited  that  it  was  payable  in  "  Four ."    Held, 

that  the  holder  of  the  note  was  not  a  ' '  holder  in  due  course  ' '  for 
it  was  not  complete  and  regular  on  its  face.  In  re  Philpott's  Es- 
tate, 151  N.  W.  Rep.  (Iowa)  825.  See  also  Bank  of  Houston  v. 
Day,  145  Mo.  App.  410.  So,  where  it  was  plainly  apparent  that 
the  date  had  been  changed.  Elias  v.  Whitney,  50  Misc.  (N.  Y.) 
326.  But  where  a  note  was  partly  printed  and  partly  written,  and 
the  words  "  payable  with  interest  "  were  in  the  same  handwriting 
as  the  other  written  portions  of  the  note,  except  the  maker 's  name, 
and  were  not  interlined,  but  written  on  a  blank  space  after  the 
words  "  Value  received,"  it  was  held  that  the  note  was  to  be 
regarded  as  complete  and  regular  on  its  face.  American  Bank  v. 
McComb,  105  Va.  473.  To  determine  the  character  of  an  indorsee 
as  a  bona  fide  holder  for  value  without  notice,  the  point  of  time  at 
which  he  parts  with  his  money  is  the  important  fact.  If  the  paper 
was  then  on  its  face  irregular — out  of  the  usual  course  of  business 
— the  effect  of  that  knowledge  on  the  indorsee  could  not  be  pre- 
vented by  subsequently  putting  it  in  a  regular  shape.  Losee  v. 
Bissell,  76  Pa.  St.  459,  462.  As  to  incomplete  instruments,  and  the 
authority  to  fill  up  blanks  therein,  see  section  14. 

Post-dated  instruments. — The  fact  that  the  instrument  is  post- 
dated affords  no  cause  of  suspicion  so  as  to  put  the  transferee  on 
inquiry.    Brewster  v.  McCardel,  8  Wend.  47S. 


9G  THE   NEGOTIABLE  INSTRUMENTS  LAW. 

Payee  as  holder  in  due  course. — At  common  law  the  payee  may 
be  a  holder  in  due  course.  See  Watson  v.  Russell,  3  B.  &  S.  34; 
5  B.  &  S.  968;  Nelson  v.  Cowing,  6  Hill,  333,  339.  Thus,  the 
holder  of  a  draft  drawn  by  a  bank  on  its  correspondent  may  be 
deemed  a  holder  in  due  course,  though  he  is  named  therein  as 
payee.  Armstrong  v.  American  Exchange  National  Bank,  133  U. 
S.  433.  Whether  the  statute  has  changed  this  rule,  the  courts  are 
not  agreed.  In  New  York,  Massachusetts  and  Alabama  it  has  been 
held  that  there  is  nothing  in  the  statute  which  precludes  the  payee 
from  being  such  a  holder.  Brown  v.  Brown,  91  Misc.  (N.  Y.)  220; 
Liberty  Trust  Co.  v.  Tilton,  217  Mass.  4G2;  Boston  Steel  &  Iron 
Co.  v.  Steuer,  183  Mass.  140;  Ex  parte  Goldberg,  67  So.  Eep.  (Ala.) 
839,  843.  See  also  Wilbour  v.  Hawkins,  94  Atl.  (R.  I.)  856.  But 
in  Iowa  and  Missouri  the  courts  have  held  that  the  delivery  of  the 
paper  to  the  payee  is  not  a  "  negotiation  "  thereof,  and  hence 
not  within  the  terms  of  this  section.  Vander  Ploeg  v.  Van  Zuuk, 
135  Iowa,  350;  Long  v.  Shafer,  185  Mo.  App.  641,  648;  St.  Charles 
Sav.  Bank  v.  Edwards,  243  Mo.  553.     See  note  to  section  14. 

Overdue  paper. — Where  commercial  paper  is  acquired  after  it 
is  overdue,  it  becomes  under  this  section,  and  section  58,  subject  to 
the  same  defenses  as  if  it  were  non-negotiable.  Jacobus  v.  James- 
town Mantel  Co.,  149  App.  Div.  (N.  Y.)  356;  Austen  v.  First  Nat. 
Bank,  150  Ky.  113;  Fairfield  Nat.  Bank  v.  Hammer,  95  Atl.  Rep. 
(Conn.)  31.  And  this  was  the  rule  at  common  law.  McKim  v. 
King,  58  Md.  502;  Marsh  v.  Marshall,  53  Pa.  St.  396;  Davis 
v.  Miller,  14  Gratt.  1;  Cottrell  v.  Watkins,  89  Va.  801.  At 
one  time  it  was  doubted  whether  the  mere  fact  that  a  negotiable 
note  was  overdue  at  the  time  of  the  transfer  was  in  itself  suf- 
ficient to  affect  the  title  of  the  holder,  and  whether  it  was  not 
necessary  that  there  should  be  something  on  the  face  of  the  paper 
besides  the  day  of  payment  to  show  that  it  had  been  actually  dis- 
honored. This  doubt  was  expressed  by  Lord  Kenyon  in  Brown 
v.  Davies,  3  T.  R.  80,  decided  in  1789;  but  Ashurst  and  Buller, 
J.,  were  of  opinion  that  the  mere  fact  of  its  being  overdue  at  the 
time  of  the  transfer  was  sufficient  to  affect  the  title,  and  that  one 
taking  a  note  under  such  circumstances  takes  it  upon  the  credit 
of  the  transferrer.  Subsequently  in  Boehm  v.  Sterling,  7  T.  R. 
423-430,  Lord  Kenyon  gave  his  assent  to  the  rule  thus  laid  down, 
and  it  has  never  since  been  questioned.  But  see  Trego  v.  Cunning- 
ham's Estate,  267  111.  448. 


RIGHTS   OF   HOLDER.  97 

Where  interest  is  overdue. — A  promissory  note  matures  when, 
by  its  terms,  the  principal  becomes  due;  and  one  who  pur- 
chases it  in  good  faith,  for  value,  before  maturity,  is  within 
the  protection  of  the  law  merchant,  although  interest  is 
overdue  at  the  time  of  such  purchase.  Kelley  v.  Whitney,  45  Wis. 
110.  But  the  fact  that  interest  is  due  and  unpaid  is  a  material 
circumstance  bearing  on  the  question  of  whether  the  purchaser 
acquired  the  note  in  good  faith  and  without  notice  of  prior  equities 
or  infirmities  in  the  title.  McPherrin  v.  Little,  36  Oklahoma,  510. 
See  also  Hart  v.  Stickney,  41  Wis.  630;  Newell  v.  Gregg,  51  Barb. 
253. 

Where  installment  overdue. — A  note  payable  by  installments  is 
overdue  when  the  first  installment  is  overdue  and  unpaid,  and  one 
who  takes  it  afterward  takes  it  subject  to  all  equities  between  the 
original  parties.    Yinton  v.  King,  4  Allen,  562. 

When  paper  deemed  overdue. — A  transfer  upon  the  day  of  ma- 
turity is  before  the  instrument  is  overdue ;  for  the  principal  debtor 
has  the  whole  of  that  day  in  which  to  pay.  Continental  Nat.  Bank 
v.  Townsend,  87  N.  Y.  8.  But  see  Sargent  v.  Southgate,  5  Pick.  312 ; 
Ayer  v.  Hutchins,  4  Mass.  370;  Pine  v.  Smith,  11  Gray,  38.  A 
check  deposited  with  a  bank  on  the  day  of  its  date  can  not  be  con- 
sidered as  overdue  when  so  deposited.  Shawmut  National  Bank 
v.  Manson,  168  Mass.  425.  A  check  dated  in  a  suburb  of  New 
York  city,  June  1,  1900,  was  sent  in  the  course  of  business  to  the 
state  of  Kansas,  where  it  arrived  on  June  8,  1900,  and  was  pur- 
chased by  a  Kansas  bank  in  good  faith  and  for  value. — Held  that 
the  check  was  not  overdue  to  such  an  extent  as  to  put  the  bank 
upon  inquiry  or  raise  any  presumption  that  it  knew  of  any  defense 
existing  between  the  original  parties.  Citizens'  State  Bank  v. 
Cowles,  89  App.  Div.  (N.  Y.)  281,  reversed  on  other  grounds  in 
180  N.  Y.  340. 

Payment  of  value — Discount  by  bank. — Under  this  section,  it  is 
not  sufficient  to  constitute  a  bank  a  holder  in  due  course  that  it 
has  discounted  the  paper  and  placed  the  proceeds  to  the  credit  of 
its  customer.  Albany  County  Bank  v.  People's  Ice  Co.,  92  App. 
Div.  (N.  Y.)  47;  Consolidation  Nat.  Bank  v.  Kirkland,  99  Id.  121; 
Merchants  Bank  v.  Santa  Maria  Sugar  Co.,  162  Id.  248 ;  Milled  v. 
Morton,  114  Va.  610;  City  Deposit  Bank  v.  Green,  130  Iowa,  384; 
McKnight  v.  Parsons,  1^6  Iowa,  390;  Elgin  City  Banking  Co.  v. 
7 


98  THE   NEGOTIABLE  INSTRUMENTS  LAW. 

Hall,  119  Tenn.  548;  Tatum  v.  Commercial  Bank,  185  Ala.  294. 
And  merely  crediting  to  a  depositor's  account  the  amount  of  a 
check   drawn  upon   another  bank,  where  the   account   continues 
to   be    sufficient   to   pay   the   check   in    case    it    is    dishonored, 
does  not  make  the  bank  a  holder  of  the  check  in  due  course  within 
this  section.     Citizens'  State  Bank  v.  Cowles,  180  N.  Y.  34G.     So, 
where  the  credit  given  by  the  bank  is  only  provisional,  Commer- 
cial Nat.  Bank  v.  Citizens'  State  Bank,  132  Iowa  706,  708;  Peoples 
State  Bank  v.  Miller,  152  N.  W.  Kep.  (Mich.)  257,  or  the  paper  is 
received  for  collection  only.     Bank  of  America  v.  Waydell,   187 
N.  Y.  115.     But  where  the  sum  deposited  has  subsequently  been, 
checked  out,  the  bank  becomes  a  holder  for  value,  although  the 
customer  by   subsequent    deposits  has  maintained    a   balance   in 
excess  of  the  amount  of  the  note;  for  in  such  case  the  rule  obtains 
that  where  a  payment  is  made  upon  general  account,  with  no  direc- 
tion as  to  its  application,  the  law  applies  it  to  the  oldest  items;. 
that  is,  the  first  debits  are  to  be  charged  against  the  first  credits. 
Merchants  Bank  v.  Santa  Maria  Sugar  Co.,  162  App.  Div.  (N.  Y.) 
248,  249.     See  also  Northfield  Nat.  Bank  v.  Arndt,  132  Wis.  383. 
And  if  the  bank  incurs  a  liability  by  reason  of  the  deposit,  as 
where  it  obligates  itself  to  honor  a  check,  it  is  a  holder  for  value. 
Montrose  Savings  Bank  v.  Claussen,  137  Iowa,  73;  Nat.  Bank  of 
Commerce  v.  Armbruster,  42  Okl.  656 ;  Elmore  Co.  Bank  v.  A  vaunt, 
66  So.  Rep.  (Ala.)  509.     So,  if  the  depositor  was  indebted  to  the 
bank,  and  the  proceeds  of  the  discount  are  applied  to  the  payment 
of  this  indebtedness.    City  Deposit  Bank  v.  Green,  130  Iowa,  384; 
Wallabout  Bank  v.  Peyton,  123  App.  Div.  (N.  Y.)  727;  Mechanics 
Bank  v.  Chardavoyne,  69  N.  J.  L.  256.     Or  the  bank  discounting 
the  paper  obtains  credit  for  its  customer  with  another  bank  for 
the  amount  of  the  proceeds.    Elgin  City  Banking  Co.  v.  Hall,  119 
Tenn.  548.    But  where  the  avails  of  a  discount  are  applied  to  an 
existing  indebtedness,  the  bank  must  show  that  there  was  an  agree- 
ment that  they  should  be  applied  in  payment  and  extinguishment 
thereof.     Consolidation  Nat.  Bank  v.  Kirkland,  99  App.  Div.  (N. 
Y.)  121.    If  a  bank  purchases  a  note  prior  to  its  maturity,  and  the 
seller  neglects  to  draw  out  the  proceeds  credited  to  him,  the  bank, 
in  the  absence  of  notice,  would  have  the  right  to  pay  out  such  pro- 
ceeds to  the  seller  even  after  maturity  of  the  note,  and  this  being 
done  in  good  faith  and  without  notice  of  defects,  would  constitute 
the  bank  a  holder  in  due  course.     National  Bank  of  Commerce  v. 
Armbruster,  42  Okla.  656,  661.     WThere  a  bank  pays  for  a  draft 


RIGHTS   OF   HOLDER,  99 

with  bill  of  lading  attached,  by  giving  credit  to  the  checking  ac- 
count of  the  drawer,  its  position  after  acceptance  by  the  drawee  is 
that  of  a  holder  in  due  course,  whether  or  not  the  drawer  had 
checks  against  the  deposit  at  the  time  of  the  drawee's  acceptance. 
Tapee  v.  Varley,  184  Mo.  App.  470. 

Bills  negotiated  before  acceptance. — Where  one  becomes  a 
holder  for  value  of  a  bill  before  acceptance  he  is  deemed  a  holder 
in  due  course  as  against  a  subsequent  acceptor  without  any  new 
consideration  proceeding  from  him  to  the  drawee.  Nat.  Park 
Bank  v.  Saitta,  127  App.  Div.  (N.  Y.)  624;  Mt.  Vernon  Nat. 
Bank  v.  Kelling-Karel  Co.,  189  111.  App.  375. 

Notice  before  presentment  of  check  given  in  payment. — Where 
the  purchaser  of  a  negotiable  instrument  gives  his  check  in  pay- 
ment in  good  faith  he  will  be  deemed  a  holder  in  due  course,  though 
he  learns  of  some  infirmity  in  the  paper  before  the  check  is  actu- 
ally paid  by  the  bank.    Miller  v.  Marks,  148  Pac.  Rep.  (Utah)  412. 

Paper  payable  in  the  alternative. — Where  a  promissory  note 
payable  to  the  order  of  A  or  B  is  indorsed  by  A  only  to  one  who 
takes  it  in  good  faith  for  value  and  without  any  notice  of  infirmity 
in  the  instrument  or  defect  in  the  title,  the  indorsee  is  a  holder  in 
due  course  under  this  section.    Voris  v.  Schoonover,  91  Kas.  530. 

Gift  of  Instrument. — The  gift  of  a  neogtiable  instrument  will 
not  make  the  donee  a  holder  in  due  course.  Greer  v.  Orchard,  175 
Mo.  App.  494. 

Accommodation  Paper. — If  one  purchases  an  accommodation 
note  for  cash,  and  sells  it  to  a  bona  fide  purchaser  in  exchange  for 
the  purchaser's  note,  the  latter  may  be  a  holder  in  due  course 
within  the  meaning  of  the  statute.  Mehlinger  v.  Harriman,  185 
Mass.  245.  Where  the  payee  gives  a  written  direction  at  the  foot 
of  the  note,  "  credit  the  drawer,"  and  the  note  is  afterward  dis- 
counted by  a  bank,  or  found  in  the  possession  of  any  person  not 
a  party  to  the  original  transaction,  the  presumption  is  that  the 
holder  is  a  holder  for  value,  and  that  the  drawer  received  the  pro- 
ceeds according  to  the  directions  so  given.  Steckel  v.  Steckel,  28 
Pa.  St.  233,  235.  As  to  what  will  constitute  value,  see  section  25. 
Prima  facie  value  is  presumed.     Section  24. 

Notice.— As  to  what  is  necessary  to  constitute  notice,  see  sec- 
tion 56. 


100  THE   NEGOTIABLE   INSTRUMENTS   LAW. 

§  53.  Instrument  payable  on  demand — negotiation 
at  unreasonable  time. — Where  an  instrument  payable 
on  demand  is  negotiated  an  unreasonable  length  of 
time  after  its  issue,  the  holder  is  not  deemed  a  holder 
in  due  course. 

What  is  a  reasonable  time. — Under  this  section  it  has  been  held 
that  a  check  issued  on  a  certain  date,  and  bearing  that  date  and 
negotiated  at  noon  of  the  following  day,  was  not  overdue  so  as  to 
carry  to  an  indorsee  notice  of  its  illegality  or  previous  dishonor. 
Matlock  v.  Scheuerman,  51  Ore.  49.  So,  of  a  check  drawn  on 
Saturday  and  negotiated  on  the  following  Monday.  Asbury  v. 
Laube,  151  Ky.  142.  So,  a  cashier's  check  issued  May  18th,  and 
indorsed  five  days  later,  was  held  to  have  been  negotiated  within  a 
reasonable  time.  Singer  Manufacturing  Co.  v.  Summers,  143  N.  C. 
102.  But  a  note  payable  on  demand  purchased  more  than  a  year 
after  its  date  was  held  to  have  been  overdue.  McAdam  v.  Grand 
Forks  Mercantile  Co.,  24  N.  D.  645.  As  to  what  is  reasonable  time 
will  depend  upon  the  facts  of  the  particular  case.  See  page  7. 
No  absolute  measure  can  be  fixed.  A  day  or  two,  Field  v.  Nicker- 
son,  13  Mass.  131,  137;  seven  days,  Thurston  v.  McKenn,  6  Mass. 
428,  and  even  a  month,  Ranger  v.  Cory,  1  Mete.  369,  is  not  too  long, 
while  eight  months,  American  Bank  v.  Jennes,  2  Mete.  2S8;  Ayres 
v.  Hutchins,  4  Mass.  370;  Nevins  v.  Townsend,  6  Conn.  7;  three 
months  and  a  half,  Stevens  v.  Brice,  21  Pick.  193;  and  even  two 
months  and  a  half,  Losee  v.  Durkin,  7  Johns.  70;  Sice  v.  Cunning- 
ham, 1  Cowen,  397,  404,  have  been  deemed  sufficient  to  discredit 
a  note.    See  note  to  sec.  71. 

Coupons — Coupons  payable  to  bearer  are,  when  overdue,  sub- 
ject to  equities;  they  are  not  in  this  respect  like  bank  notes. 
McKim  v.  King,  58  Md.  502. 

§  54.  Notice  before  full  amount  paid. — "Where  the 
transferee  receives  notice  of  any  infirmity  in  the  instru- 
ment or  defect  in  the  title  of  the  person  negotiating 
the  same  before  he  has  paid  the  full  amount  agreed  to 
be  paid  therefor,  he  will  be  deemed  a  holder  in  due 
course  only  to  the  extent  of  the  amount  theretofore 
paid  by  him. 


RIGHTS   OF    HOLDER.  101 

Common  Law  Rule — Reason  of. — This  section  is  merely  declara- 
tory of  the  law  as  it  existed  before  the  enactment  of  the  statute. 
Albany  County  Bank  v.  People's  Ice  Co.,  92  App.  Div.  (N.  Y.)  47. 
The  case  falls  within  the  general  rule  that  the  portion  of  an  un- 
performed contract  which  is  completed  after  notice  of  a  fraud  is 
not  within  the  principle  which  protects  a  bona  fide  purchaser. 
Dreser  v.  Missouri,  etc.,  E.  K.  Construction  Co.,  93  U.  S.  93. 

§  55.  When  title  defective. — The  title  of  a  person 
who  negotiates  an  instrument  is  defective  within  the 
meaning  of  this  act  when  he  obtains  the  instrument,  or 
any  signature  thereto,  by  fraud,  duress,  or  force  and 
fear,  or  other  unlawful  means,  or  for  an  illegal  consid- 
eration, or  when  he  negotiates  it  in  breach  of  faith, 
or  under  such  circumstances  as  amount  to  a  fraud. 

Variant  readings. — In  Wisconsin  the  following  is  added  at  the 
end  of  the  section:  "  and  the  title  of  such  person  is  absolutely 
void  when  such  instrument  or  signature  was  so  procured  from  a 
person  who  did  not  know  the  nature  of  the  instrument  and  could 
not  have  obtained  such  knowledge  by  the  use  of  ordinary  care." 

Renewal  Notes — Usury. — Under  this  section  the  title  of  a  per- 
son negotiating  a  note  is  defective  where  the  only  consideration 
was  usury  on  a  former  note  between  the  same  parties.  Keene  v. 
Behan,  40  Wash.  505. 

Paper  obtained  by  misrepresentation. — Where  brokers  employed 
to  purchase  stock  represented  that  they  had  acquired  the  stock, 
and  received  a  check,  though  they  had  not  in  fact  done  so,  their 
title  was  defective  within  the  meaning  of  this  section.  People's 
State  Bank  v.  Miller,  152'  N.  W.  Rep.  (Mich.)  527. 

Where  fraud  does  not  affect  party. — The  fraud  in  putting  the 
paper  into  circulation  must  be  a  fraud  against  the  defendant. 
Kinney  v.  Kruse,  28  Wis.  189.  Thus,  the  fact  that  one  who  held 
possession  of  a  note  for  the  payee  put  it  in  circulation  in  fraud  of 
his  rights  is  no  defense  in  a  suit  by  the  holder  against  the  maker. 
Id.  And  where  the  fraud  consists  in  the  misapplication  of  the . 
proceeds  received  for  the  paper  it  will  not  affect  the  paper  in  the 
hands  of  the  holder,  as  he  is  not  in  any  manner  bound  to  look  to 


102  THE   NEGOTIABLE  INSTRUMENTS  LAW. 

their  application,  nor  responsible  for  the  misappropriation  of 
them.  Gray's  Admr.  v.  Bank  of  Kentucky,  29  Pa.  St.  365.  There 
is  no  distinction  between  obtaining  a  note  by  fraud  and  fraudu- 
lently putting  it  in  circulation.  National  Reserve  Bank  v.  Morse, 
163  Mass.  381,  385. 

Where  only  part  of  signatures  are  obtained  by  fraud. — Under 
this  section  where  a  note  is  made  by  several  persons,  and  the 
signatures  of  some  of  the  makers  are  obtained  by  fraud,  the  paper 
is  voidable  by  all  the  others,  though  they  were  not  themselves 
deceived;  for  when  several  persons  assume  such  an  obligation  it 
is  material  and  important  that  all  who  join  as  makers  should  share 
equally  in  bearing  the  burden  of  payment,  and  if,  through  the 
fraud  of  the  payee,  such  equality  of  burden  is  disturbed,  and  the 
burden  increased  as  to  some  of  the  persons  signing  the  paper,  such 
fraud  renders  the  title  defective  as  to  all.  Schmidt  v.  Bank  of 
Commerce,  234  U.  S.  64;  Hodge  v.  Smith,  130  Wis.  326;  Aukland 
v.  Arnold,  131  Wis.  64. 

§  56.  What  constitutes  notice  of  defect. — To  consti- 
tute notice  of  an  infirmity  in  the  instrument  or  defect 
in  the  title  of  the  person  negotiating  the  same,  the  per- 
son to  whom  it  is  negotiated  must  have  had  actual 
knowledge  of  the  infirmity  or  defect,  or  knowledge  of 
such  facts  that  his  action  in  taking  the  instrument 
amounted  to  bad  faith. 

Rule  at  common  law. —  The  rule  adopted  in  the  statute  is  that 
which  was  established  by  the  great  weight  of  authority.  In  num- 
erous well-considered  cases  it  was  held  that  the  holder  is  not 
bound  at  his  peril  to  be  on  the  alert  for  circumstances  which  might 
possibly  excite  the  suspicion  of  wary  vigilance;  he  does  not  owe  to 
the  party  who  put  the  paper  afloat  the  duty  of  active  inquiry  in 
order  to  avert  the  imputation  of  bad  faith.  The  rights  of  the  holder 
are  to  be  determined  by  the  simple  test  of  honesty  and  good  faith, 
and  not  by  a  speculative  issue  as  to  his  diligence  or  negligence. 
The  holder's  right  cannot  be  defeated  without  proof  of  actual 
notice  of  the  defect  in  title,  or  bad  faith  on  his  part  evidenced  by 
circumstances.  Though  he  may  have  been  negligent  in  taking  the 
paper,  and  omitted  precautions  which  a  prudent  man  would  have 


RIGHTS   OF   HOLDER.  103 

taken,  nevertheless,  unless  he  acted  mala  fide,  his  title,  according 
to  settled  doctrines,  will  prevail.  Valley  Savings  Bank  v.  Mercer, 
97  Md.  458,  479;  Cheever  v.  Pittsburgh,  Shenango  &  Lake  Erie 
E.  R.  Co.,  150  N.  Y.  59,  G5;  American  Exchange  National  Bank 
v.  New  York  Belting,  etc.,  Co.,  148  N.  Y.  705;  Knox  v.  Eden  Musee 
Am.  Co.,  148  N.  Y.  454;  Canajoharie  National  Bank  v.  Diefendorf, 
123  N.  Y.  202;  Vosburgh  v.  Diefendorf,  119  N.  Y.  357;  Jarvis  v. 
Manhattan  Beach  Co.,  148  N.  Y.  652 ;  Murray  v.  Lardner,  2  Wall. 
110;  Swift  v.  Smith,  102  U.  S.  442;  Belmont  v.  Hoge,  35  N.  Y.  65; 
Welsh  v.  Sage,  47  N.  Y.  143;  Nat.  Bank  of  Republic  v.  Young,  41 
N.  J.  Eq.  531;  Fifth  Ward  Sav.  Bank  v.  First  Nat.  Bank,  48  N.  J. 
Law.  513;  Credit  Company  v.  Howe  Machine  Co.,  54  Conn.  357; 
Ladd  v.  Eranklin,  37  Conn.  64;  Croft's  Appeal,  42  Conn. 
154;  Morton  v.  N.  A.  &  Selma  Ry.  Co.,  79  Ala.  590;  Phelan  v. 
Moss,  67  Pa.  St.  59;  Moorehead  v.  Gilmore,  77  Pa.  St.  118;  Second 
National  Bank  v.  Morgan,  165  Pa.  St.  199 ;  Frank  v.  Lilienf eld,  33 
Gratt.  377. 

Application  of  the  section. — For  cases  applying  this  section  see 
Interboro  Brewing  Co.  v.  Doyle,  165  App.  Div.  (N.  Y.)  646;  Coffin 
v.  Tevis,  164  Id.  314;  Wallabout  Bank  v.  Peyton,  123  Id.  727;  Ger- 
man-American Bank  v.  Cunningham,  97  Id.  244;  Van  Slyke  v. 
Rooks,  181  Mich.  88;  Pratt  v.  Rounds,  160  Ky.  358;  Farmers'  Bank 
v.  First  Nat.  Bank,  164  Ky.  548;  Moutenegro-Riehm  Co.  v.  Illinois 
Trust  Co.,  Id.  608;  Davis  v.  Clark,  85  N.  J.  L.  696;  Arnd  v.  Ayles- 
worth,  145  Iowa,  185;  American  Nat.  Bank  v.  Lundy,  21  N.  D.  167. 

Opportunity  for  inquiry. — As  the  transferee  is  not  bound  to 
make  inquiry,  the  fact  that  the  transferrer  lives  near  him  is  not 
material.     Seltzer  v.  Deal,  135  N.  C.  428. 

Financial  condition  of  maker. — The  fact  that  the  holder  may 
have  known  of  the  maker's  impecunious  circumstances  is  not 
enough  to  put  him' upon  inquiry;  for  one  to  whom  the  paper  is 
offered  has  a  right  to  rely  upon  an  indorsees  responsibility,  even 
though  he  knows  that  the  maker  is  in  poor  circumstances.  Baruch 
v.  Buckley,  167  App.  Div.  (N.  Y.)  113. 

Payment  of  value. — The  payment  of  value  is  a  circumstance  to 
be  taken  into  account,  with  other  facts,  in  determining  the  good 
faith  of  the  purchaser,  but  it  is  not  conclusive.  Cunningham  v. 
Scott,  90  Hun,  410,  411;  Tischler  v.  Schurman,  49  Misc.  (N. 
Y.)  257. 


104  THE   NEGOTIABLE   INSTRUMENTS   LAW. 

Purchasing  paper  at  a  discount. — Under  this  section  the  mere 
fact  that  the  holder  has  taken  the  paper  at  a  large  discount  is  not 
sufficient,  standing  alone,  to  deprive  him  of  his  claim  to  be  a  holder 
in  due  course.  Ham  v.  Merritt,  150  Ky.  11;  Wells  v.  Duffy,  69 
Wash.  310;  McNamara  v.  Jose,  28  Wash.  461.  But  where  the  dis- 
count is  very  large,  that  circumstance  may  be  considered  in  con- 
nection with  other  facts  in  determining  the  question  of  the  pur- 
chaser's good  faith.  Williams  v.  Huntington,  68  Md.  590;  Sabine 
v.  Paine,  166  App.  Div.  (N.  Y.)  10;  Harris  v.  Johnson,  89  Conn. 
128. 

Eate  of  interest. — A  bank  is  not  chargeable  with  bad  faith  be- 
cause it  discounted  notes  at  seven  per  cent,  per  annum  when  the 
legal  rate  of  interest  is  but  six  per  cent.  Bank  of  Monongahela 
Valley  v.  Weston,  172  N.  Y.  259. 

Purchase  of  check  by  bank. — The  fact  that  a  bank  purchases 
a  check,  instead  of  receiving  it  on  deposit  for  collection,  is  not 
such  a  deviation  from  the  usual  course  of  business  as  will  justify 
a  conclusion  of  bad  faith  on  its  part.  Citizens  State  Bank  v. 
Cowles,  89  App.  Div.  (N.  Y.)  281. 

Statement  of  consideration. — The  fact  that  the  nature  of  the 
consideration  is  stated  upon  the  face  of  the  paper  is  not  notice  of 
any  defect  of  title.     Bank  of  Sampson  v.  Hatcher,  151  N.  C.  359. 

Paper  made  by  corporation. — Where  a  corporation  is  authorized 
to  execute  notes,  a  negotiable  note  executed  and  issued  by  it  for 
an  ultra  vires  purpose  is  not  void  in  the  hands  of  an  innocent 
purchaser  for  value  before  maturity,  even  though  the  purpose 
for  which  the  note  was  executed  was  in  violation  of  the  public 
policy  of  the  state.  Jefferson  Bank  v.  Chapman,  122  Tenn. 
415,  416. 

Paper  indorsed  to  corporation. — The  provisions  of  this  section 
apply  to  all  classes  of  persons,  artificial  as  well  as  natural.  Cox 
&  Sons  Co.  v.  Northampton  Brewing  Co.  245  Pa.  St.  418. 

Paper  of  corporation  received  from  officer. — One  who  receives 
the  notes  of  a  corporation  from  one  of  its  officers  in  payment  of, 
or  as  security  for,  a  personal  debt  of  such  officer  does  so  at  his 
peril.  Prima  facie  the  act  is  unlawful,  and  unless  actually  au- 
thorized, the  purchaser  will  be  deemed  to  have  taken  them  with 


RIGHTS   OP   HOLDER.  105 

notice  of  the  rights  of  the  corporation.  Wilson  v.  Metropolitan 
Ky.  Co.,  120  N.  Y.  145,  150.  And  where  the  maker  of  a  note, 
which  is  payable  to  his  order,  and  purports  to  be  indorsed  by 
a  corporation,  procures  it  to  be  discounted  for  his  own  benefit,  this 
of  itself,  if  unexplained,  is  notice  that  the  indorsement  is  not 
made  in  the  usual  course  of  business,  but  is  for  the  accommodation 
of  the  maker.  National  Park  Bank  v.  German-American  Mutual 
Warehousing  and  Security  Company,  116  N.  Y.  281.  But  the 
mere  fact  that  the  payee  of  a  promissory  note,  made  by  a  corpora- 
tion, is  a  director  of  such  corporation,  is  not  notice  to  a  transferee 
of  any  infirmity  in  the  paper,  nor  is  it  sufficient  to  put  him  upon 
inquiry  concerning  the  circumstances  under  which  it  was  issued; 
and  the  rule  applicable  to  notes  made  by  officers  of  a  corporation 
to  their  own  order  and  used  to  pay  their  individual  obligations, 
has  no  application  to  notes  made  by  duly  authorized  officers  pay- 
able to  a  director.  Orr  v.  South  Amboy  Terra  Cotta  Co.,  113 
App.  Div.  (N.  Y.)  103. 

Request  to  delay  presentment. — The  fact  that  the  payee  on 
transferring  a  check  stated  that  the  drawer  had  asked  that  it  be 
held  for  a  few  days  before  presentment  does  not  charge  the  holder 
with  notice.     Matlock  v.  Scheuerman,  51  Ore.  49. 

Business  reputation  of  transferor. — The  fact  that  the  trans- 
feree may  know  that  the  person  from  whom  he  receives  the  paper 
is  "crooked"  in  business  matters  does  not  affect  his  title  or  make 
it  his  duty  to  inquire  about  the  paper.  Setzer  v.  Deal,  135  N.  C. 
428.  In  the  case  last  cited,  the  court  said:  "It  would  be  almost 
impossible  for  the  business  of  banking  to  be  carried  on  if  it  was 
incumbent  on  bank  officers,  whenever  negotiable  paper  was  offered 
for  discount  or  sale,  to  inquire  into  whether  any  of  the  parties 
to  be  charged  were  crooked  in  their  business  methods." 

Place  of  contract — Estoppel. — Where  a  married  woman,  for  her 
husband's  accommodation,  indorsed  a  note  dated  and  payable  in 
New  York,  it  was  held  that  she  was  estopped  from  showing,  as 
against  a  New  York  bank  which  had  discounted  the  paper  in  good 
faith,  that  the  indorsement  had  been  made  in  New  Jersey,  where 
her  contract  was  void.  Chemical  Nat.  Bank  v.  Kellogg,  183  N.  Y. 
92,  96. 

Conflicting  instructions. — For  a  case  where  a  judgment  was  re- 
versed because  the  trial  judge  coupled  with  the  rule  of  the  statute 


106  THE   NEGOTIABLE  INSTRUMENTS  LAW. 

a  statement  that  the  notice  would  he  sufficient  if  it  would  put  a 
reasonably  prudent  man  upon  inquiry.  See  Smathers  v.  Hotel  Co., 
1G2  N.  C.  346. 

Negligence  as  evidence  of  had  faith.— By  the  great  weight  of 
modern  authority,  gross  negligence  is  evidence  from  which  bad 
faith  may  be  inferred,  but  it  does  not  of  itself  constitute  bad 
faith  as  a  matter  of  law.  That  is  a  question  for  the  jury  after 
consideration  of  all  the  evidence.    Kipp  v.  Smith,  137  Wis.  234,  238. 

Weight  of  evidence. — Where  the  testimony  as  to  the  holder's 
good  faith  is  undisputed  it  is  the  duty  of  the  court  to  so  charge 
the  jury.  Van  Slyke  v.  Rooks,  181  Mich.  88.  As  to  when  evi- 
dence is  not  sufficient  to  support  a  verdict  against  the  holder, 
see  Cole  v.  Harrison,  167  App.  Div.  (N.  Y.)  336;  Southwest  Nat. 
Bank  v.  Baker,  23  Idaho,  428;  McLaughlin  v.  Dopps,  84  Wash. 
442;  Commercial  Security  Co.  v.  Jack,  29  N.  D.  67.  For  the  rule 
in  Massachusetts,  see  Phillips  v.  Eldridge,  221  Mass.  103. 

Signature  obtained  by  duress.— Commercial  paper  executed  un- 
der duress  is  void,  even  though  there  may  be  some  consideration 
to  support  it.    Magoon  v.  Reber,  76  Wis.  392. 

Paper  received  from  note  broker. — The  mere  fact  that  the  holder 
for  value  of  a  promissory  note  made  by  a  third  party  receives  it 
from  a  person  engaged  in  the  note-brokerage  business,  as  collateral 
security  for  a  loan  to  such  broker,  is  not  sufficient  to  raise  a  doubt 
as  to  the  authority  of  the  broker  to  so  deal  with  the  note.  Amer- 
ican Ex.  Nat.  Bank  v.  New  York  Belting  and  Packing  Company, 
148  N.  Y.  698.  And  a  bank  has  a  right  to  assume,  as  to  notes 
offered  to  it,  whether  for  discount  or  as  collateral  security,  by  a 
customer  who  has  an  account  with  it,  and  who  is  in  the  habit  of 
borrowing  money  from  it,  that  the  customer  is  acting  in  good  faith 
and  within  his  lawful  rights;  and  the  fact  that  the  customer  is 
engaged  in  the  business  of  note-brokerage  is  not  enough  to  deprive 
the  bank  of  the  right  to  indulge  in  such  assumption.  Id.  The 
fraudulent  misappropriation  by  the  broker  of  the  proceeds  of  dis- 
count is  not  sufficient  to  put  the  holder  to  the  proof  of  his  bona 
fides.    Sloan  v.  The  Union  Banking  Company,  67  Pa.  St.  470. 

Indorsement  without  recourse. — As  under  section  thirty-six  a 
qualified  indorsement,  that  is  to  say,  an  indorsement  without  re- 
course to  the  indorser,  does  not  impair  the  negotiable  character 


EIGHTS   OF   HOLDER.  107 

of  the  instrument,  it  may  not  be  regarded  as  evidence  of  any  in- 
firmity in  the  instrument  or  defect  in  the  title  of  the  person  nego- 
tiating the  same.  Leavitt  v.  Thurston,  38  Utah,  351;  Page  v. 
Ford,  65  Ore.  450;  Bank  of  Sampson  v.  Hatcher,  151  N.  C.  359. 
But  upon  the  question  of  good  faith,  the  fact  that  the  indorsement 
was  in  this  form  may  be  considered  in  connection  with  the  other 
circumstances  of  the  case.  Merchants  Nat.  Bank  v.  Vranson,  165 
N.  C.  344. 

Post-dated  instrument. — The  negotiation  of  a  post-dated  check 
before  the  day  of  its  date  does  not  put  the  indorsee  upon  notice. 
Triphonoff  v.  Sweeney,  65  Ore.  209;  Albert  v.  Hoffman,  64  Misc. 
(N.  Y.)  87.    See  section  12. 

§  57.  Rights  of  holder  in  due  course. — A  holder  in 
due  course  holds  the  instrument  free  from  any  defect 
of  title  of  prior  parties  and  free  from  defenses  avail- 
able to  prior  parties  among  themselves,  and  may  en- 
force payment  of  the  instrument  for  the  full  amount 
thereof  against  all  parties  liable  thereon. 

Variant  'readings. — In  Illinois,  after  the  word  "  themselves," 
the  following  is  interpolated:  "  except  the  defect  and  the  defense 
specified  in  §  10  of  an  Act  entitled  'An  Act  to  revise  the  law  in 
relation  to  promissory  notes,  bonds,  due-bills  and  other  instru- 
ments in  writing,'  approved  March  18,  1874,  in  force  July  1,  1874, 
and  except  the  defect  and  defense  specified  in  §§  131  and  136  of  an 
Act  to  revise  the  law  in  relation  to  criminal  jurisprudence,  ap- 
proved March  27,  1874,  in  force  July  1,  1874,  known  as  §§  131  and 
136  of  chapter  38  of  the  Revised  Statutes  of  Illinois."  In  Wiscon- 
sin the  following  is  added  at  the  end  of  the  section:  "  except  as 
provided  in  §§  1944  and  1945  of  these  statutes,  relating  to  in- 
surance premiums,  and  also  in  cases  where  the  title  of  the  person 
negotiating  such  instrument  is  void  under  the  provision  of  §§  1676- 
25  of  this  act." 

Stolen  securities. — Under  this  section,  a  holder  in  due  course  of 
a  promissory  note  or  check  payable  to  bearer  can  acquire  a  good 
title  thereto  from  one  who  has  stolen  it.  Massachusetts  Nat.  Bank 
v.  Snow,  187  Mass.  160;  Jefferson  Bank  v.  Chapman,  122  Tenn. 
415;  Schaeffer  v.  Marsh,  90  Misc.    (N.  Y.)    307.     And  this  rule 


108  THE   NEGOTIABLE  INSTRUMENTS   LAW. 

applies  to  negotiable  bonds  payable  to  bearer.  City  of  Adrian 
v.  Whitney  Central  Bank,  180  Mich.  171,  179.  But  this  section 
is  to  be  read  in  connection  with  section  15 ;  and  if  the  instrument 
is  incomplete  when  stolen,  it  is  not  valid  in  the  hands  of  any 
holder.  Linick  v.  Nutting,  140  App.  Div.  (N.  Y.)  265;  Schaeffer 
v.  Marsh,  supra. 

Paper  made  in  violation  of  statute. — One  of  the  most  important 
questions  that  has  arisen  under  the  Act  is  whether  a  holder  in 
due  course  may  recover  upon  paper  void  as  between  the  immediate 
parties  because  given  in  violation  of  some  statute,  as,  for  example, 
where  the  instrument  is  given  for  a  gambling  debt,  or  is  tainted 
with  usury.  A  leading  case  upon  the  subject  is  Wirt  v.  Stubble- 
field,  17  App.  Cas.  D.  C.  283.  In  that  case  it  was  held  that  under 
the  Negotiable  Instruments  Law  a  bona  fide  holder  may  enforce  a 
promissory  note  against  the  maker,  even  though  the  note  was  given 
for  a  gambling  debt,  and  that  this  statute  has  repealed  the  stat- 
utes of  16  Car.  2  Ch.  7  and  9  Anne,  Ch.  14,  which  were  in  force 
in  the  District  of  Columbia.  In  the  course  of  the  opinion  it  was 
said  by  Alvey,  C.  J. :  "  We  know,  moreover,  that  the  great  and 
leading  object  of  the  act,  not  only  with  Congress,  but  with  the 
large  number  of  the  principal  commercial  states  of  the  Union  that 
have  adopted  it,  has  been  to  establish  a  uniform  system  of  law 
to  govern  negotiable  instruments  wherever  they  might  circulate  or 
be  negotiated.  It  was  not  only  uniformity  of  rules  and  principles 
that  was  designed,  but  to  embody  in  a  codified  form  as  fully  as 
possible,  all  the  law  upon  the  subject,  to  avoid  conflict  of  decisions, 
and  the  effect  of  mere  local  laws  and  usages  that  have  heretofore 
prevailed.  The  great  object  sought  to  be  accomplished  by  the 
enactment  of  the  statute,  was  to  free  the  negotiable  instrument, 
as  far  as  possible,  from  all  latent  or  local  infirmities  that  would 
otherwise  inhere  in  it  to  the  prejudice  and  disappointment  of  in- 
nocent holders  as  against  all  the  parties  to  the  instrument  pro- 
fessedly bound  thereby.  This  clearly  could  not  be  effected  so 
long  as  the  instrument  was  rendered  absolutely  null  and  void  by 
local  statute,  as  against  the  original  maker  or  acceptor,  as  is  the 
case  by  the  operation,  indeed,  by  the  express  provision,  of  the 
Statutes  of  Charles  and  Anne. 

Same  subject— Rule  in  Kentucky  and  West  Virginia.— But,  on 
the  other  hand,  it  has  been  held  in  Kentucky  and  West  Virginia 
that  this  section  applies  only  to  paper  that  might  have  been  oblig- 


EIGHTS   OF    HOLDER.  109 

atory  between  the  parties  to  it,  and  that  hence  a  holder  in  due 
course  cannot  recover  where  the  note  is  void  for  usury,  or  has 
been  given  for  a  gambling  debt,  or  in  violation  of  the  statute  re- 
specting "  peddlers'  notes."  Alexander  v.  Hazelrigg,  123  Ky. 
677;  Lawson'v.  First  Nat.  Bank,  102  S.  W.  Rep.  (Ky.)  324; 
Citizens'  Bank  v.  Crittenden  Record  Press,  150  Ky.  G34; 
Holzbog  v.  Bakrow,  156  Ky.  161;  Raleigh  County  Bank  v. 
Poteet,  74  W.  Va.  511;  Twentieth  Street  Bank  v.  Jacobs,  74  W. 
Va.  528.  In  the  case  first  cited,  the  court  said :  "It  has  been 
the  policy  of  this  state  to  suppress  gambling,  and  the  statutes 
making  gaming  contracts  void  were  founded  upon  what  the  legis- 
lature has  for  many  years  deemed  to  be  sound  public  policy.  It 
is  not  conceivable  that  the  general  assembly,  in  the  passage  of  the 
act  of  1904  for  the  protection  of  innocent  holders  of  negotiable 
instruments,  intended  to  or  did  repeal  section  1955,  Ky.  St.  1903, 
which  declares  all  gaming  contracts  void.  In  our  opinion,  the 
disappointment  now  and  then  of  an  innocent  holder  of  a  nego- 
tiable instrument  would  not  be  as  hurtful  and  injurious  to  the 
best  interests  of  the  state  as  the  removal  of  the  ban  from  gamins: 
contracts."  And  in  the  other  Kentucky  case  cited  it  was  said: 
"The  negotiable  instruments  statute  is  a  most  comprehensive 
piece  of  legislation.  It  goes  into  minutest  detail  in  dealing  with 
the  subjects  embraced  by  it.  The  whole  scope  of  it  is  shown 
to  be  the  dealing  with  commercial  paper,  so  as  to  protect  inno- 
cent purchasers  of  such  against  mere  defenses  available  as  be- 
tween the  original  parties.  It  gives  such  paper  currency,  free 
from  original  defenses.  But  it  applies  only  to  paper  that  might 
have  been  obligatory  between  the  parties.  But,  where  the  parties 
were  never  bound  because  the  law  made  the  note  void,  as  con- 
trary to  public  policy  as  expressed  in  the  statutes,  the  negotiable 
instruments  act  does  not  apply,  and  ought  not  to.  The  preven- 
tion of  crime  is  of  more  importance  than  the  fostering  of  com- 
merce. The  later  act  should  be  read  in  view  of  its  purpose,  and 
not  as  intending  to  repeal  other  statutes  passed  in  the  exercise 
of  the  police  power  of  the  state  to  suppress  crime  and  fraud." 
Compare  Kushner  v.  Abbott,  156  Iowa,  598;  American  Savings 
Bank  v.  Helgersen,  64  Wash.  54;  Gray  v.  Boyle,  55  Id.  598. 

Same  subject— Rule  in  New  York.— In  New  York  there  has  been 
no  decision  upon  the  point  by  the  Court  of  Appeals,  and  the  de- 
cisions of  the  lower  courts  are  conflicting.     In  the  late  case  of 


110  THE   NEGOTIABLE  INSTRUMENTS  LAW. 

Sabine  v.  Paine,  1G6  App.  Div.  9,  the  Appellate  Division  for  the 
Second  Department  held  that,  notwithstanding  the   provision   of 
section  96  of  the  Negotiable  Instruments  Law,  the  rule  still  obtains 
that  a  negotiable  instrument  which  is  void  in  its  inception   bo- 
cause  of  usury  is  invalid  as  against  the  maker  even  in  the  hands 
of  a  holder  in  due  course.     See  also  Strickland  v.  Henry,  66  App. 
Div.  23;  Oppikofer  v.  Murphy,  146  App.  Div.  581.     But  the  con- 
trary has  been  held  by  the  Appellate  Term  for  the  First  Depart- 
ment.    Klar  v.  Kostiuk,  65  Misc.  199;  Emanuel  v.  Misieki,  149  N. 
Y.  Supp.  905;  Oeser  v.  Behrend,  89  Misc.  391.     In  the  case  last 
cited  Shearn,  J.,  said:     "I  do  not  argee  that  this  decision  prac- 
tically writes  the  inhibition  against  usury  from  the  statutes,  but 
rather  with  Mr.  Justice  Laughlin,  in  Schlesinger  v.  Kelly,  114  App. 
Div.  546,  where  he  said:     '  The  usury  laws  remain  in  full  force, 
but  to  facilitate  the  free  circulation  of  negotiable  paper  by  pro- 
tecting holders  thereof  in  due  course  for  value  in  their  right  to 
enforce  the  same,  the  usury  laws  are  to  that  extent  superseded  by 
the  provisions  of  section  96  of  the  Negotiable  Instrument  Law/ 
And  in  Schlesinger  v.  Lehmaier  (191  N.  Y.  69)  the  Court  of  Ap- 
peals held  that  the  provisions  of  the  State  Banking  Law  on  the 
subject  of  usury  are  to  be  construed  in  connection  with  section  96 
of  the  Negotiable  Instruments  Law,  and  that  a  bank  which  had 
purchased  paper  infected  with  usury,  could  not  recover  on  the 
same  without  showing  that  it  became  a  holder  in  due  course.     The 
court   said:     "It  pertains  to  negotiable  instruments,  and  should 
be  construed  in  connection  with  the   other  legislation  upon  the 
same  subject.     In  the  Negotiable  Instruments  Law  it  is  expressly 
provided  that  a  holder,  who  becomes  such  before  maturity  in  good 
faith  and  for  value  without  notice  of  any  infirmity,  holds  the  same 
'free  from  any  defect  of  title  of  prior  parties  and  free  from  de- 
fenses available  to  prior  parties  among  themselves,  and  may  en- 
force the  payment  of  the  instrument  for  the  full  amount  thereof 
against  all  parties  liable  thereon.'     Here  we  have  the  legislative 
intent  expressed  in  clear  and  unmistakable  language.     It   estab- 
lishes a  just  and  proper  rule,  which  protects  the  bank  in  making 
purchases  of  commercial  paper  in  good  faith  before  maturity,  for 
value   and  without  notice  of  infirmity.     But  where  it  purchases 
with  actual  knowledge  of  the  infirmity  or  defect  or  knowledge  of 
such  facts  that  its  action  in  taking  the  instrument  amounted  to- 
bad  faith,  it  is  not  protected."     See  also  Schlesinger  v.  Gilhooly,. 


RIGHTS   OF   HOLDER.  Ill 

189  N.  Y.  1,  04;  Schelsinger  v.  Kelly,  114  App.  Div.  (N.  Y.)  516, 
552-555;  Broadway  Trust  Co.  v.  Manheimer,  47  Misc.  (N.  Y.)  465. 

Reason  for  conflicting  opinions. — The  subject  is  one,  perhaps, 
upon  which  the  courts  will  never  agree;  for  they  will  construe  the 
section  with  reference  to  the  policy  of  their  respective  states.  In 
some  states,  the  requirements  of  commerce  will  be  the  controlling 
consideration;  in  others,  the  protection  of  the  weak  and  the  ignor- 
ant. The  modern  view  is  admirably  expressed  in  Chemical  Nat. 
Bank  v.  Kellogg  (183  N.  Y.  92),  where  it  was  said  by  Vann,  J.: 
"The  business  of  the  country  is  done  so  largely  by  means  of  com- 
mercial paper  that  the  interests  of  commerce  require  that  a  prom- 
issory note,  fair  on  its  face,  should  be  as  negotiable  as  a  govern- 
ment bond.  Every  restriction  upon  the  circulation  of  negotiable 
paper  is  an  injury  to  the  state,  for  it  tends  to  derange  trade  and 
hinder  the  transaction  of  business."  And  it  is  plain  that  if  a 
negotiable  instrument  is  to  be  void  in  the  hands  of  a  holder  in 
due  course,  because  it  was  given  for  a  usurious  loan,  or  for  a 
gambling  debt,  or  to  a  "peddler,"  or  for  the  price  of  a  stallion, 
or  for  a  lightning  rod,  not  merely  that  instrument  alone 
is  affected,  but  a  doubt  is  cast  upon  all  commercial  paper  originat- 
ing in  that  community.  For  other  cases  applying  local  statutes, 
see  Quiggle  v.  Herman,  131  Wis.  379  (note  given  for  a  stallion), 
Arndt  v.  Sjoblom,  131  Wis.  642  (note  given  for  lightning-rods), 
National  Bank  of  Commerce  v.  Pick,  13  N.  D.  74  (note  given  to 
foreign  corporation  having  no  state  license),  Sullivan  v.  German 
Nat.  Bank,  18  Colo.  App.  99  (certificate  of  deposit  transferred  for 
gambling  debt),  Gordon  v.  Levine,  194  Mass.  418  (note  made  on 
Sunday). 

Drunkenness  as  a  defense. — In  Wisconsin  this  section  has  been 
so  changed  that  a  holder  in  due  course  takes  no  title  where  the 
note  was  absolutely  void  in  its  inception  because  of  the  intoxica- 
tion of  the  maker,  destroying  the  rational  faculties  of  the  mind. 
Green  v.  Gunsten,  154  Wis.  69. 

Defense  of  usury  by  indorser. — Under  the  statute  an  indorser 
cannot,  as  against  a  holder  in  due  course,  set  up  the  defense  that 
the  instrument  is  void  for  usury  in  its  inception;  for  the  obligation 
of  the  indorser  is  a  separate  and  independent  contract.  Horowitz. 
v.  Wollowitz,  59  Miss.  (N.  Y.)  520. 


112  THE   NEGOTIABLE   INSTRUMENTS  LAW. 

Amount  of  recovery. — The  rule  adopted  in  the  statute  is  that 
of  the  Supreme  Court  of  the  United  States.  Cromwell  v.  County 
of  Sac,  96  U.  S.  51,  60.  There  was  considerable  conflict  in  the  deci- 
sions of  the  State  courts.  In  the  case  cited  the  Supreme  Court  said : 
"We  are  of  opinion  that  a  purchaser  of  a  negotiable  security  be- 
fore maturity,  in  cases  where  he  is  not  personally  chargeable  with 
fraud,  is  entitled  to  recover  its  full  amount  against  its  maker, 
though  he  may  have  paid  less  than  its  par  value,  whatever  may 
have  been  its  original  infirmity.  We  are  aware  of  numerous  de- 
cisions in  conflict  with  this  view  of  the  law;  but  we  think  the 
sounder  rule,  and  the  one  in  consonance  with  the  common  under- 
standing and  usage  of  commerce,  is  that  the  purchaser,  at  what- 
ever price,  takes  the  benefit  of  the  entire  obligation  of  the  maker. 
Public  securities  and  those  of  private  corporations  are  constantly 
fluctuating  in  price  in  the  market,  one  day  being  above  par  and 
the  next  below  it,  and  often  passing  within  short  periods  from 
one-half  of  their  nominal  to  their  full  value.  Indeed,  all  sales  of 
such  securities  are  made  with  reference  to  prices  current  in  the 
market,  and  not  with  reference  to  their  par  value.  It  would  in- 
troduce, therefore,  inconceivable  confusion  if  bona  fide  purchasers 
in  the  market  were  restricted  in  their  claims  upon  such  securities 
to  the  sums  they  had  paid  for  them.  This  rule  in  no  respect  im- 
pinges upon  the  doctrine  that  one  who  makes  a  loan  upon  such 
paper,  or  takes  it  as  collateral  security  for  a  precedent  debt,  may 
be  limited  in  his  recovery  to  the  amount  advanced  or  secured." 
See  also  Birrell  v.  Dickerson,  64  Conn.  61 ;  Rowland  v.  Fowler,  47 
Conn.  349;  Williams  v.  Huntington,  68  Md.  590;  Moore  v.  Baird, 
30  Pa.  136.  The  statute  changes  the  rule  in  New  York.  Harger 
v.  Wilson,  63  Barb.  237;  Huff  v.  Wagner,  63  Barb.  230;  Todd  v. 
Shelbourne,  8  Hun,  512.  See  also  Holcomb  v.  Wyckoff,  35  N.  J. 
Law  38;  Bramhall  v.  Atlantic  National  Bank,  36  N.  J.  Law  243; 
Oppenheimer  v.  Farmers'  and  Mechanics'  Bank,  97  Tenn.  19. 
Under  this  section,  a  bona  fide  purchaser  of  a  note  and  mortgage, 
is  not  limited  to  a  recovery  of  the  amount  paid  therefor,  but  is 
entitled  to  enforce  the  same  for  the  full  amount  due  thereon,  even 
though  the  execution  of  the  note  was  induced  by  fraud,  and  it  was 
bought  at  a  heavy  discount.  Lassas  v.  McCarty,  47  Ore.  474;  Mc- 
Namara  v.  Jose,  28  Wash.  461.  Or  though  the  note  was  without 
consideration  and  invalid  as  between  the  maker  and  the  payee. 
Jefferson  Bank  v.  Chapman,  122  Tenn.  416.  As  to  amount  of  re- 
covery where  the  instrument  is  taken  as  collateral  security,  see 


RIGHTS   OP   HOLDER.  113 

section  27.  For  eases  Avhere  the  purchaser  has  paid  only  part  of 
the  amount  agreed  to  be  paid  before  receiving  notice,  see  section 
54. 

Right  of  election  as  to  parties  to  sue. — Though  the  statute 
confers  upon  the  holder  the  right  to  enforce  payment  against  all 
the  parties  liable  upon  the  instrument,  he  has  a  right  of  election 
as  to  whom  he  will  sue,  and  the  party  sued  cannot  complain  that 
other  parties  equally  liable  are  not  sued.  Chateau  Trust  &  Banking 
Co.  v.  Smith,  133  Ky.  418;  Curtis  v.  Davidson,  215  N.  Y.  395. 

§  58.  When  subject  to  original  defenses. — In  the 
hands  of  any  holder  other  than  a  holder  in  due  course, 
a  negotiable  instrument  is  subject  to  the  same  defenses 
as  if  it  were  non-negotiable.  But  a  holder  who  derives 
his  title  through  a  holder  in  due  course,  and  who  is  not 
himself  a  party  to  any  fraud  or  illegality  affecting  the 
instrument,  has  all  the  rights  of  such  former  holder  in 
respect  of  all  parties  prior  to  the  latter. 

Variant  readings. — In  Illinois  and  Wisconsin  the  word  "duress" 
is  interpolated  after  the  word  "  fraud  "  in  the  second  sentence. 
In  Alabama,  the  words  "  has  all  the  rights  of  such  latter  "  are 
substituted  for  all  after  the  word  "  instrument  "  in  the  second 
sentence.  In  North  Dakota  the  word  "  holder  "  is  substituted 
for  ' '  latter  "  at  the  end  of  the  section.  In  Illinois  and  Wiscon- 
sin, the  words  "  such  holder  "  are  substituted  for  "  latter." 

Evidence  contradicting  writing. — Under  this  section  a  party  can- 
not interpose  a  defense  which  denies  the  tenor  of  the  note  or  bill. 
Bradley  Engineering  Co.  v.  Heyburn,  56  Wash.  628. 

What  defenses  may  be  interposed. — It  was  not  deemed  expedient 
to  make  provision  as  to  what  equities  the  transferee  will  be  sub- 
ject to;  for  the  matter  may  be  affected  by  the  statutes  of  the  vari- 
ous states  relating  to  set-off  and  counter-claim.  In  an  act  designed  to 
be  uniform  in  the  various  states,  no  more  could  be  done  than  fix  the 
rights  of  holders  in  due  course.  On  the  question  whether  only  such 
equities  may  be  asserted  as  attach  to  the  paper,  or  whether  equities 
arising  out  of  collateral  matters  may  also  be  asserted,  the  decisions 
are  conflicting.     In  England  it  was  decided  in  Burroughs  v.  Moss, 

8 


114  THE   NEGOTIABLE  INSTRUMENTS  LAW. 

10  Barn.  &  Cress.  558,  that  the  indorsee  of  an  overdue  bill  is  liable 
to  such  equities  only  as  attach  on  the  bill  or  note  itself,  and  not  to 
claims  arising  out  of  collateral  matters,  such  as  a  general  set-off 
is.  This  is  a  leading  case,  and  has  since  been  uniformly  followed 
in  that  country.  Stein  v.  Yglesias,  1  Crom.  Mees.  &  Eos.  565; 
Whitehead  v.  Walker,  10  Mees.  &  Welsb.  696.  See  also  Hughes  v. 
Large,  2  Pa.  St.  103;  Long  v.  Ehawn,  75  Pa.  St.  128;  Young  v. 
Shriner,  80  Pa.  St.  463;  Davis  v.  Miller,  14  Gratt.  1;  Kilcrease  v. 
White,  6  Fla.  45;  Cumberland  Bank  v.  Haun,  3  Harrison,  223; 
Chandler  v.  Drew,  6  N.  H.  469;  Kobertson  v.  Breedlone,  7  Porter, 
541 ;  Tuscumbia,  etc.,  R.  R.  Co.  v.  Rhodes,  8  Ala.  206-224 ;  Robin- 
son v.  Lymon,  10  Conn.  31;  Steadman  v.  Jilman,  Id.  56;  Adair  v. 
Lenox,  15  Oregon,  489.  Under  the  statute  the  defenses  available 
against  the  holder  are  only  such  as  exist  f.t  the  time  of  the  as- 
sigment.  Marling  v.  FitzGerald,  138  Wis.  93.  Thus,  a  person 
to  whom  the  instrument  is  transferred  as  a  gift  takes  it  subject 
to  all  equities  then  existing  between  the  original  parties,  but  not 
subject  to  those  which  arise  thereafter.  First  Nat.  Bank  of 
Champlain  v.  Wood,  128  N.  Y.  35;  Baxter  v.  Little,  6  Met.  7. 
For  a  case  applying  this  section,  see  Craig  v.  Palo  Alto  Stock 
Farm,  16  Idaho,  701. 

Person  claiming  under  holder  in  due  course. — Whenever  nego- 
tiable paper  has  passed  into  the  hands  of  a  party  unaffected  by 
previous  infirmities  its  character  as  an  available  security  is  estab- 
lished, and  its  holder  can  transfer  it  to  others  with  the  like  immun- 
ity. Cover  v.  Myers,  75  Md.  406;  Black  v.  First  National  Bank 
of  Westminster,  96  Md.  399.  The  principle  is,  that  the  promise 
being  good  to  the  prior  indorsee  or  holder,  free  from  objection  on 
the  ground  of  fraudulent  or  illegal  consideration,  he  has  the  power 
of  transferring  it  to  others,  with  the  same  immunity,  as  an  incident 
to  the  legal  right  which  he  had  acquired  in  the  instrument.  Kinney 
v.  Kruse,  28  Wis.  183,  190-191.  See  also  Boyd  v.  McCann,  10  Md. 
118.  Thus,  if  A  gives  to  B  his  note,  and  C  becomes  the  holder 
thereof  in  due  course,  any  subsequent  holder  could  stand  on  C's 
title  and  enforce  the  note  against  A,  though  before  taking  the  same 
he  had  notice  of  a  defense  which  A  had  to  the  note  as  against  B. 
But  if,  in  the  case  supposed,  the  note  should  be  indorsed  by  C  to  D> 
and  by  the  latter  to  E,  and  by  him  to  F,  under  circumstances  which 
would  give  D  a  defense  as  a  party  thereto,  then  if  F  had  notice  of 
the  equities  of  both  A  and  D  he  could  enforce  the  note  against  A> 


RIGHTS   OF   HOLDER.  115 

but  not  against  D.  For  cases  applying  this  provision  of  the  section, 
see  McMurray  v.  McMurray,  258  Mo.  405,  417;  Horan  v.  Mason, 
141  App.  Div.  (N.  Y.)  89. 

§  59.  Presumption — burden  of  proof — exception. — 
Every  holder  is  deemed  prima  facie  to  be  a  holder  in 
due  course;  but  when  it  is  shown  that  the  title  of  any 
person  who  has  negotiated  the  instrument  was  defec- 
tive, the  burden  is  on  the  holder  to  prove  that  he  or 
some  person  under  whom  he  claims  acquired  the  title 
as  a  holder  in  due  course.  But  the  last-mentioned  rule 
does  not  apply  in  favor  of  a  party  who  became  bound 
on  the  instrument  prior  to  the  acquisition  of  such  de- 
fective title. 

Common-law  rule. — The  rule  adopted  in  the  statute  is  the  one 
which  prevailed  in  New  York  and  many  other  states.  Canajoharie 
National  Bank  v.  Diefendorf,  123  N.  Y.  191 ;  Joy  v.  Diefendorf,  130 
N.  Y.  6;  Jordan  v.  Grover,  99  Gal.'  194;  Market  and  Fulton  Nat. 
Bank  v.  Sargent,  85  Me.  349;  Haines  v.  Merrill,  56  N.  J.  Law, 
312 ;  Sullivan  v.  Langley,  120  Mass.  437 ;  Merchants'  National  Bank 
v.  Haverhill  Iron  Works,  159  Mass.  158;  Conant  v.  Johnston,  165 
Mass.  450,  452;  National  Kevere  Bank  v.  Morse,  163  Mass.  381, 
385;  Williams  v.  Huntington,  68  Md.  590;  Griffith  v.  Shipley,  74 
Md.  591;  Ellicott  v.  Martin,  6  Md.  509;  Hutchinson  v.  Boggs  & 
Kirk,  28  Pa.  St.  294;  Wilson  v.  Lazier,  11  Gratt.  477;  Vathir  v. 
Zane,  6  Gratt.  246.  The  rule  which  obtained  in  the  Federal  Courts 
imposed  upon  the  defendant  the  burden  of  proving  bad  faith.  First 
Nat.  Bank  v.  Moore,  148  Fed.  Kep.  953,  957;  Murray  v.  Lardner, 
2  Wall.  110;  Hotchkiss  v.  National  Bank,  21  Wall.  354;  Collins  v. 
Gilbert,  94  U.  S.  753;  King  v.  Doane,  139  U.  S.  166. 

Burden  of  proof. — Under  this  section  it  is  not  necessary  for  the 
holder  to  offer  in  the  first  instance  any  proof  that  he  is  a  holder  in 
due  course.  Kerr  v.  Anderson,  16  N.  D.  36;  Bruce  v.  Citizens' 
Bank,  185  Ala.  221.  But  when  it  is  shown  that  the  title  of  a  prior 
holder  was  defective  the  burden  shifts  to  the  plaintiff.  Interboro 
Brewing  Co.  v.  Doyle,  165  App.  Div.  (N.  Y.)  646;  Peterson  v. 
Fowler,  162  Id.  21;  Eisenberg  v.  Lefkowitz,  142  Id.  570;  German- 
American  Bank  v.  Cunningham,  97  Id.  244;  Mitchell  v.  Baldwin, 


116  THE   NEGOTIABLE  INSTRUMENTS   LAW. 

88  Id.  265,  2G9;  Waxberg  v.  Stappler,  83  Misc.  (N.  Y.)  78;  Jus- 
tice v.  Stoneciper,  267  111.  448;  Arnd  v.  Aylesworth,  145  Iowa, 
185;  McKnight  v.  Parsons,  136  Iowa,  390;  Ireland  v.  Shore,  91 
Ivans.  326;  Campbell  v.  Fourth  Nat.  Bank,  137  Ky.  555;  Callahan 
v.  Louisville  Dry  Goods  Co.,  140  Ky.  714;  Asbury  v.  Taube,  151 
Ky.  142;  Muir  v.  Edelen,  156  Ky.  212;  Lewiston  Trust  &  S.  D. 
Co.  v.  Shackford,  213  Mass.  432;  Regester's  Sons  Co.  v.  Reed,  185 
Mass.  226,  227;  Phillips  v.  Eldridge,  221  Mass.  103;  Harris  v. 
Johnson,  89  Conn.  128;  People's  State  Bank  v.  Miller,  152  N. 
W.  Rep.  (Mich.)  257;  Hill  v.  Dillon,  176  Mo.  App.  192,  198; 
Ostenberg  v.  Kanka,  95  Neb.  314,  316;  Piper  v.  Neylon,  88  Neb. 
253;  Fidelity  Trust  Co.  v.  Ellen,  163  N.  C.  45;  American  Nat. 
Bank  v.  Fountain,  148  N.  C.  590;  Fidelity  Trust  Co.  v.  White- 
head, 165  N.  C.  74;  Singer  Mfg.  Co.  v.  Summers,  143  N.  C.  102; 
Standard  Trust  Co.  v.  Commercial  Nat.  Bank,  167  N.  C.  260; 
Schulthers  v.  Sellers,  223  Pa.  St.  516;  Second  Nat.  Bank  v.  Hoff- 
man, 229  Pa.  St.  429;  Cook  v.  Am.  Tubing  &  Webbing  Co.,  28 
R.  I.  41;  Leavitt  v.  Thurston,  38  Utah,  351;  Keene  v.  Behan,  40 
Wash.  505;  Hodge  v.  Smith,  130  Wis.  326;  Grebe  v.  Swords,  28 
N.  D.  330;  Stotts  v.  Fairfield,  163  Iowa,  726;  City  of  Adrian  v. 
Whitney  Central  Nat.  Bank,  180  Mich.  171.  And  the  statute  re- 
quires the  holder  to  show  affirmatively  the  facts  constituting  good 
faith  on  his  part.  Keene  v.  Behan,  40  Wash.  505.  See  also  other 
cases  cited  above.  And  where  the  plaintiff  seeks  to  establish  this 
by  his  own  testimony,  the  credibility  of  such  testimony,  though  it 
is  undisputed,  is  for  the  jury.    Joy  v.  Diefendorf,  130  N.  Y.  6. 

Inference  as  to  good  or  bad  faith. — Where  an  inference  may 
be  drawn  from  the  surrounding  circumstances  that  on  the  one  hand 
tends  to  discredit  plaintiff's  testimony  as  to  his  lack  of  knowledge 
concerning  the  infirmity  in  the  paper  and  his  good  faith  in  taking 
it,  and  on  the  other  hand  tends  to  establish  his  good  faith,  the 
question  is  for  the  jury.  Matlock  v.  Scheuerman,  51  Ore.  49;  Mc- 
Knight v.  Parsons,  136  Iowa,  390;  M.  Groh's  Son's  Co.  v.  Sch- 
neider, 34  Misc.  (N.  Y.)  195.  In  Massachusetts,  the  rule  is  well 
settled  that  when  testimony  warranting  a  finding  that  the  plain- 
tiff was  a  holder  in  due  course  of  a  note  originating  in  fraud  is 
given  by  witnesses  called  by  the  plaintiff,  a  verdict  cannot  be 
directed  for  the  plaintiff  as  a  matter  of  law.  Phillips  v.  Eldridge, 
221  Mass.  103. 


EIGHTS    OF    HOLDER.  117 

Testimony  as  to  good  faith. — The  holder  may  testify  that  he- 
acted  in  good  faith.  Smathers  v.  Taxaway  Hotel  Co.,  167  N.  C. 
474. 

Presumption  when  paper  is  stolen. — Where  negotiable  securities- 
have  been  stolen  and  negotiated,  the  burden  is  upon  the  holder  to> 
show  that  he  is  himself  a  holder  in  due  course,  or  that  he  claims- 
under  such  a  holder;  and  there  is  no  presumption  that  the  thief 
negotiated  the  securities  before  they  became  due.  Northampton 
Nat.  Bank  v.  Kidder,  106  N.  Y.  221;  Hinckley  v.  Merchants'  Nat. 
Bank,  131  Mass.  147. 

Where  payee  is  described  as  trustee. — That  the  payee  is  de- 
scribed as  "  trustee  "  does  not  let  in  defenses  against  a  bona  fide 
holder  for  value.    Bank  v.  Looney,  99  Tenn.  278. 

Instruction  limiting  proof. — Under  this  section  an  instruction 
that  the  burden  is  on  the  holder  to  show  "  that  some  person  under 
whom  he  claims  acquired  the  title  in  good  faith,"  is  erroneous. 
Hawkins  v.  Young,  127  Iowa,  281. 

Failure  of  consideration. — The  provision  of  this  section  which 
imposes  upon  the  holder  the  burden  of  proof  does  not  apply  where 
the  defense  is  failure  of  consideration,  since  section  fifty-five, 
which  defines  a  defective  title,  does  not  include  such  a  case.  Bank 
of  Polk  v.  Wood,  189  Mo.  App.  62,  67;  Broderick  &  Bascom  Rope 
Co.  v.  McGrath,  81  Misc.  (N.  Y.)  199;  Cole  Banking  Co.  v.  Sin- 
clair, 34  Utah,  454. 

Breach  of  warranty. — So,  such  provision  does  not  apply  where 
the  defense  is  breach  of  warranty.  Ireland  v.  Shore,  91  Kans.  326, 
329. 

Where  fraud  is  subsequent  to  liability. — The  last  sentence  is 
necessary  to  qualify  the  general  statement.  If  A  issues  his  note 
to  B,  and  C  gets  possession  of  it  and  fraudulently  negotiates  it  to 
D,  the  fraud  of  C  in  nowise  affects  A,  and  is  no  defense  to  him 
when  sued  on  the  instrument  by  D.  Thus,  it  has  been  held  that  the 
fact  that  one  who  held  possession  of  a  note  for  the  payee  puts  it  in 
circulation  in  fraud  of  his  rights  is  no  defense  in  a  suit  by  the 
holder  against  the  maker;  nor  does  it  change  the  burden  of  proof, 
so  as  to  require  the  plaintiff  to  show  in  the  first  instance  that  he 
is  a  bona  fide  holder  for  value.    Kinney  v.  Kruse,  28  Wis.  183. 


118  THE   NEGOTIABLE  INSTRUMENTS  LAW. 


ARTICLE  VI. 

Liability  op  Parties. 

Section  60.  Liability  of  maker. 

61.  Liability  of  drawer. 

62.  Liability  of  acceptor. 

63.  When  person  deemed  indorser. 

64.  Liability  of  irregular  indorser. 

65.  Warranty  where  negotiation  by  delivery 

or  qualified  indorsement. 

66.  Liability  of  general  indorser. 

67.  Liability  of  indorser  where  paper  negoti- 

able by  delivery. 

68.  Order  in  which  indorsers  are  liable. 

69.  Liability  of  agent  or  broker. 

§  60.  Liability  of  maker. — The  maker  of  a  negoti- 
able instrument  by  making  it  engages  that  he  will  pay 
it  according  to  its  tenor,  and  admits  the  existence  of 
the  payee  and  his  then  capacity  to  indorse. 

Where  there  is  more  than  one  maker. — When  a  promissory  note 
is  executed  by  two  persons  jointly  and  severally  the  presumption 
is  that  the  debt  was  created  for  their  equal  benefit,  and  the  burden 
of  proving  that  one  of  the  makers  signed  the  note  as  surety  for  the 
other  is  upon  the  party  alleging  it.  Brady  v.  Brady,  110  Md.  656. 
But  a  joint  action  cannot  be  maintained  against  all  the  makers, 
where  the  note  on  its  face  states  that  the  liability  of  each  is  limited 
to  a  proportional  part  of  the  amount.  National  Bank  of  Pkoenix- 
ville  v.  Buckwalter,  214  Pa.  St.  289. 

Where  note  secured  by  collateral. — The  fact  that  the  holder 
had  other  collateral  securities  for  the  same  debt  more  than  sufficient 
to  cover  it,  from  which,  however,  the  debt  had  not  been  realized,  is 
not  a  ground  of  defense  on  the  part  of  the  maker.  Lord  v.  Ocean 
Bank,  20  Pa.  St.  384. 


LIABILITY   OF   PARTIES.  119 

Where  payment  secured  by  indorser. — The  fact  that  the  in- 
dorser has  deposited  with  the  holder  security  for  the  payment  of 
the  note  is  no  defense  to  the  maker  in  an  action  by  the  holder. 
People's  Nat.  Bank  v.  Kice,  149  App.  Div.  (N.  Y.)  18. 

Liability  of  accommodation  maker. — Under  the  statute  the 
maker  of  a  promissory  note  is  "  primarily  liable  "  thereon,  though 
he  signs  only  for  accommodation.  Vanderford  v.  Farmers',  etc., 
Nat.  Bank,  105  Md.  164;  Kichards  v.  Market  Exchange  Bank,  81 
Ohio  St.  348;  First  State  Bank  v.  Williams,  164  Ky.  143;  Fritts 
v.  Kirchdorfer,  136  Ky.  643;  Murphy  v.  Panter,  62  Ore.  522;  Hun- 
ter v.  Harris,  63  Ore.  505;  Cellers  v.  Meachem,  49  Ore.  186;  Wal- 
stenholme  v.  Smith;  34  Utah,  300;  Bradley  Engineering,  etc.,  Co. 
v.  Hey  burn,  56  Wash.  628;  First  Nat.  Bank  v.  Meyer,  152  N.  W. 
Rep.  (N.  D.)  657.    See  note  to  section  120. 

Existence  of  payee. — Where  the  name  of  the  payee  is  a  trade 
or  assumed  name,  and  the  instrument  is  issued  for  value,  the  maker 
is  estopped  from  setting  up  that  the  instrument  is  payable  to  a 
fictitious  payee,  if  by  such  averment  the  instrument  would  be  de- 
feated.   Jones  v.  Home  Furnishing  Co.,  9  App.  Div.  (N.  Y.)  103. 

§  61.  Liability  of  drawer. — The  drawer  by  drawing 
the  instrument  admits  the  existence  of  the  payee  and 
his  then  capacity  to  indorse;  and  engages  that  on  due 
presentment  the  instrument  will  be  accepted  or  paid, 
or  both,  according  to  its  tenor,  and  that  if  it  be  dis- 
honored and  the  necessary  proceedings  on  dishonor  be 
duly  taken,  he  will  pay  the  amount  thereof  to  the 
holder,  or  to  any  subsequent  indorser  who  may  be 
compelled  to  pay  it.  But  the  drawer  may  insert  in 
the  instrument  an  express  stipulation  negativing  or 
limiting  his  own  liability  to  the  holder. 

Variant  readings. — In  Colorado  and  Illinois,  the  word  "  subse- 
quent "  near  the  end  of  the  first  sentence  is  omitted.  In  North 
Carolina,  through  what  was  doubtless  an  error  in  engrossing,  the 
word  "  negotiating  "  is  substituted  for  "  negativing,"  near  the 
.end  of  the  section.  In  New  York,  through  an  error  in  engrossing, 
the  word  "and"  has  been  substituted  for  "or"  between  the 
words  "accepted"   and  "paid." 


120  THE  NEGOTIABLE  INSTRUMENTS  LAW. 

§  62.  Liability  of  acceptor. — The  acceptor  by  ac- 
cepting the  instrument  engages  that  he  will  pay  it  ac- 
cording to  the  tenor  of  his  acceptance;  and  admits: 

1.  The  existence  of  the  drawer,  the  genuineness  of 
his  signature,  and  his  capacity  and  authority  to  draw 
the  instrument;  and 

2.  The  existence  of  the  payee  and  his  then  capacity 
to  indorse. 

Variant  readings. — In  Kentucky  and  Missouri  the  word  ' '  then  ' r 
in  subdivision  two  is  omitted. 

Drawer's  signature — Rule  at  common  law. — Ever  since  the  deci- 
sion in  Price  v.  Neal,  3  Burrows,  1354,  it  has  been  a  settled  rule  of 
commercial  law  that  the  drawee  is  presumed  to  know  the  signature 
of  the  drawer;  and  if  he  pays  a  bill  to  which  the  drawer's  name  has 
been  forged  he  is  bound  by  the  act  and  cannot  recover  the  money. 
The  law  proceeds  upon  the  theory  that  the  drawee  must  know  the 
signature  of  his  correspondent  much  better  than  the  holder  can, 
and  that,  therefore,  the  holder  may  cast  upon  him  the  entire  respon- 
sibility of  determining  as  to  the  genuineness  of  the  instrument. 
If  he  fails  to  discover  the  forgery  the  law  imputes  to  him  negli- 
gence, and  although  he  has  made  the  payment  under  a  mistake,  and 
parts  with  his  money  without  receiving  the  supposed  equivalent, 
and  although  the  holder  has  obtained  the  money  without  considera- 
tion, still  the  drawee  cannot  be  relieved  from  the  consequences  of 
his  neglect  at  the  expense  of  the  holder,  and  the  latter  may  retain 
the  money  in  equity  and  good  conscience.  See  Bank  of  U.  S.  v. 
Bank  of  Georgia,  10  Wheat.  333;  Marine  Nat.  Bank  v.  Nat.  City 
Bank,  59  N.  Y.  67 ;  Nat.  Park  Bank  v.  Ninth  Nat.  Bank,  46  N.  Y. 
77 ;  Bank  of  St.  Albans  v.  Mechanics'  Bank,  10  Vt.  141 ;  Commer- 
cial &  Farmers'  Nat.  Bank  v.  First  Nat.  Bank,  30  Md.  11 ;  Levy  v. 
Bank  of  the  United  States,  4  Dallas,  234;  S.  C.  1  Binney,  27. 

Same  subject — Rule  under  the  statute. — The  rule  laid  down  in 
Price  v.  Neal  (supra),  has  been  adopted  in  the  statute.  Title 
Guarantee  &  Trust  Co.  v.  Haven,  196  N.  Y.  487,  492;  Nat.  Bank 
of  Rolla  v.  First  Nat.  Bank  of  Salem,  141  Mo.  App.  719;  Bank  of 
Commerce  v.  Mechanics'  Nat.  Bank,  148  Mo.  App.  1;  Farmers ' 
Nat.  Bank  of  Augusta  v.  Farmers',  etc.,  Bank  of  Maysville,  159 
Ky.  141;  First  Nat.  Bank  v.  Bank  of  Cottage  Grove,  59  Ore.  388; 


LIABILITY   OF  PARTIES.  121 

Cherokee  Nat.  Bank  v.  Union  Trust  Co.,  33  Okla.  342;  State  Bank 
v.  Cumberland  S.  &  G.  Co.,  168  N.  C.  605. 

Rule  in  Pennsylvania. — In  Pennsylvania  this  matter  is  regulated 
by  the  statute  of  1849,  which  was  not  repealed  by  the  Negotiable 
Instruments  Law.  Union  Nat.  Bank  v.  Franklin  Nat.  Bank,  249 
Pa.  375.  The  effect  of  that  statute  and  the  cases  upon  the  sub- 
ject is  that  the  mere  acceptance  or  payment  of  forged  paper  is 
not  of  itself  a  bar  to  the  recovery  of  the  money  by  the  party 
paying,  nor  is  such  party  absolutely  bound  to  discover  and  give 
notice  of  the  forgery  on  the  very  day  of  payment.  All  that 
he  need  do  in  any  case  is  to  give  ample  notice  promptly  according 
to  the  circumstances  and  the  usage  of  the  business,  and  unless  the 
position  of  the  party  receiving  the  money  has  been  altered  for  the 
worse  in  the  meantime  the  date  of  the  notice  is  not  material.  Iron 
City  Nat.  Bank  v.  Fort  Pitt  Nat.  Bank,  159  Pa.  St.  46,  52. 

Rule  in  other  states. — For  other  cases  on  this  subject,  see 
People's  Bank  v.  Franklin  Bank,  88  Tenn.  299 ;  First  Nat.  Bank  of 
Danvers  v.  First  Nat.  Bank  of  Salem,  151  Mass.  280;  Nat.  Bank  of 
North  America  v.  Bangs,  160  Mass.  441;  Ellis  v.  Insurance  Com- 
pany, 4  Ohio  St.  268;  First  Nat.  Bank  v.  Bicker,  71  111.  439; 
Bouvant  v.  San  Antonio  Nat.  Bank,  63  Tex.  610;  Deposit  Bank  of 
Georgetown  v.  Fayette  Nat.  Bank,  90  Ky.  10. 

Indorsement  of  payee,  etc. — Acceptance  admits  the  signature  of 
the  drawer,  but  is  no  proof  or  admission  of  the  indorsement  by 
the  payee,  whether  the  bill  be  payable  to  the  drawer's  own  order 
or  to  the  order  of  another  person.  Williams  v.  Drexel,  14  Md.  566. 
And  the  drawee  is  not  presumed  to  know  the  handwriting  in  the 
body  of  the  instrument.  Continental  Nat.  Bank  v.  Tradesman's 
Bank,  36  App.  Div.  (N.  Y.)  112;  Gunston  v.  Heat  and  Power  Co., 
181  Pa.  St.  327. 

Capacity  of  drawer. — Thus,  if  the  bill  is  drawn  by  a  corpora- 
tion, the  acceptor  cannot  set  up  as  a  defense  that  it  was  without 
legal  capacity  to  draw  the  bill.  Halifax  v.  Lyle,  3  Welsby,  H.  & 
G.  446.  So,  if  the  bill  is  drawn  by  an  infant,  Jones  v.  Darch,  4 
Price,  300;  Taylor  v.  Croker,  4  Esp.  187;  or  a  married  woman, 
Cowton  v.  Wickersham,  54  Pa.  St.  302. 

Authority  to  draw. — The  delivery  of  a  bill  or  check  by  one  per- 
son to  another  for  value  implies  a  representation  on  the  part  of 


122  THE   NEGOTIABLE  INSTRUMENTS  LAW. 

the  drawer  that  the  drawee  is  in  funds  for  its  payment,  and  the 
subsequent  acceptance  of  such  check  or  bill  constitutes  an  admis- 
sion of  the  truth  of  the  representation,  which  the  drawer  is  not 
allowed  to  retract.  By  such  acceptance  the  drawee  admits  the 
truth  of  the  representation,  and  having  obtained  a  suspension  of 
the  holder's  remedies  against  the  drawer,  and  an  extension  of 
credit  by  his  admission,  he  is  not  afterward  at  liberty  to  controvert 
the  fact  as  against  a  holder  in  due  course.  Heuertematte  v.  Mor- 
ris, 101  N.  Y.  63,  70. 

Acceptance  for  accommodation. — If  the  acceptance  be  for  the 
drawer's  accommodation  the  acceptor  does  not  thereby  become 
entitled  to  sue  the  drawer  upon  the  bill;  but  when  he  has  paid 
the  bill,  and  not  before,  he  may  recover  back  the  amount  from 
the  drawer  in  an  action  for  money  had  and  received.  Christian 
v.  Keen,  80  Va.  369,  377.  See  also  Whitwell  v.  Brigham,  19  Pick. 
117;  Henderson  v.  Thornton,  37  Miss.  448;  Suydam  v.  Combs,  3 
Green  (N.  J.)  133. 

Capacity  of  payee  to  indorse. — Thus,  the  acceptor  would  not  be 
permitted  to  show  that  the  payee  at  the  time  of  the  acceptance 
was  a  lunatic.    Smith  v.  Marsaek,  6  C.  B.  486. 

§  63.  When  person  deemed  indorser. — A  person  plac- 
ing his  signature  upon  an  instrument  otherwise  than 
as  maker,  drawer  or  acceptor  is  deemed  to  be  an  indor- 
ser, unless  he  clearly  indicates  by  appropriate  words 
his  intention  to  be  bound  in  some  other  capacity. 

Indication  of  intention  to  be  bound  otherwise. — The  intention 
to  be  bound  in  some  capacity  other  than  as  indorser  must  be 
indicated  by  appropriate  language  used  for  that  purpose;  and 
such  intention  may  not  be  inferred  from  conduct,  or  from  lan- 
guage that  is  equivocal.  McDonald  v.  Luckenbach,  170  Fed.  Rep. 
434,  95  C.  C.  A.  604,  607.  But  where  one  wrote  upon  the  back 
of  a  note  the  words  "I  hereby  guarantee  payment  of  the  within 
note,"  it  was  held  that  he  had  by  the  appropriate  word  "guar- 
antee" indicated  his  intention  not  to  be  bound  as  indorser.  Noble 
v.  Beeman,  Spaulding  Co.,  65  Oregon,  93.  So,  where  the  person 
signing  bound  himself  to  pay  the  amount  at  maturity  "without 
condition,"  he  was  held  not  to  be  an  indorser.     Hibernia  Bank 


LIABILITY   OP   PARTIES.  123 

&  Trust  Co.  v.  Dresser,  132  La.  532.     For  a  case  applying  this 
section,  see  Lewy  v.  Wilkinson,  135  La.  105. 

Officers  of  corporation  indorsing. — Under  this  section  the  fact 
that  persons  who  sign  their  names  in  blank  upon  a  note  given  by 
a  corporation  are  officers  of  the  corporation,  and  execute  the  note 
in  its  behalf,  does  not  enlarge  their  individual  liability,  and  bind 
them  otherwise  than  as  indorsers.  McDonald  v.  Luckenbach,  170 
Fed.  Rep.  434. 

Partner  indorsing  individually. — Under  this  section  a  partner, 
by  individually  indorsing  a  firm  note,  adds  to  his  liability  as  maker 
a  several  and  distinct  liability  as  indorser.  Nat.  Exchange  Bank 
v.  Lubrano,  29  R.  I.  64;  Fourth  Nat.  Bank  v.  Mead,  216  Mass. 
521.     See  note  to  section  64. 

Parol  evidence  to  vary  status. — Under  this  section  parol  evidence 
is  not  admissible  to  show  that  one  who  signed  as  an  indorser  in- 
tended to  be  bound  as  a  maker,  since  this  would  be  to  vary  the 
legal  effect  of  the  written  instrument.  First  Nat.  Bank  v.  Bickel, 
143  Ky.  754 ;  Hopkins  v.  Commercial  Bank,  64  Fla.  310 ;  Baumeister 
v.  Kuntz,  53  Fla.  340;  Ensign  v.  Flagg,  177  Mich.  317.  In  a  late 
case  in  Maryland  the  Court  of  Appeals  of  that  state  said:  "  Since 
the  enactment  of  the  negotiable  instruments  act  by  the  different 
states,  the  questions  raised  by  the  preceding  sections  have  received 
much  judicial  consideration,  although  they  have  not  been  raised 
directly  in  this  court.  We  have  made  a  diligent  search  through  the 
many  state  reports,  and  have  found  an  absolute  unanimity  of  opin- 
ion. Everywhere  it  has  been  held  that  the  words  of  section  82  are 
to  be  taken  in  their  literal  sense.  That  is,  if  a  person  places  his 
name  on  an  instrument  other  than  as  a  maker,  drawer,  or  acceptor, 
he  is  only  to  be  held  to  the  obligations  of  an  indorser,  unless  he 
adds  words  to  indicate  otherwise.  The  act  does  not  merely  raise 
a  presumption  that  he  is  an  indorser,  but  his  status  to  the  instru- 
ment is  fixed  by  it,  and  cannot  be  changed  by  parol  proof." 
Lichtner  v.  Roach,  95  Atl.  Rep.  (Md.)  62.  But  in  a  case  in  Ten- 
nessee, however  (Mercantile  Bank  v.  Busby,  120  Tenn.  652).  parol 
evidence  was  admitted  to  show  that  certain  stockholders  of  a  cor- 
poration, who  had  placed  their  signatures  on  the  back  of  a  promis- 
sory note  made  by  another  stockholder,  intended  to  bind  them- 
selves as  joint  makers,  and  were  liable  though  not  given  notice  of 
dishonor.    But  this  seems  to  be  a  confusion  of  legal  principles.    To 


124  THE   NEGOTIABLE   INSTRUMENTS  LAW. 

show  the  agreement  between  persons  who  are  only  secondarily  lia- 
ble, as  authorized  by  section  68,  does  not  contradict  the  writing 
itself;  but  to  show  that  a  party  who  appears  upon  the  paper  as  an 
indorser,  and,  therefore,  liable  secondarily,  is  in  fact  a  maker  and 
liable  primarily,  certainly  varies  the  legal  effect  of  the  instrument. 
The  nature  and  extent  of  the  contract  is  implied  by  law  from  the 
fact  that  the  name  of  the  indorser  is  written  across  the  back  of  the 
bill  or  note  (see  Sec.  63) ;  and  the  contract  arising  from  a  signa- 
ture so  placed  is  as  well  settled  as  though  the  terms  thereof  had 
been  written  out  above  the  signature;  and  parol  evidence  is  just 
as  inadmissible  in  regard  to  this  contract  as  in  regard  to  any  other 
contract  in  writing.  Bird  v.  Kay,  40  App.  Div.  (N.  Y.)  533,  537;  ^ 
Hodgens  v.  Jennings,  148  Id.  879,  S81. 

§  64.  Liability  of  irregular  indorser. — Where  a  per- 
son, not  otherwise  a  party  to  an  instrument,  places 
thereon  his  signature  in  blank  before  delivery,  he  is 
liable  as  indorser  in  accordance  with  the  following 
rules : 

1.  If  the  instrument  is  payable  to  the  order  of  a 
third  person,  he  is  liable  to  the  payee  and  to  all  sub- 
sequent parties. 

2.  If  the  instrument  is  payable  to  the  order  of  the 
maker  or  drawer,  or  is  payable  to  bearer,  he  is  liable 
to  all  parties  subsequent  to  the  maker  or  drawer. 

3.  If  he  signs  for  the  accommodation  of  the  payee, 
he  is  liable  to  all  parties  subsequent  to  the  payee. 

Variant  readings. — In  Illinois  the  following  changes  are  made: 
For  subdivision  one,  the  following  is  substituted:  "  If  the  in- 
strument is  a  note  or  bill,  payable  to  the  order  of  a  third  person, 
or  an  accepted  bill,  payable  to  the  order  of  the  drawer,  he  is  liable 
to  the  payee  and  to  all  subsequent  parties;"  and  for  subdivision 
two,  the  following:  "  If  the  instrument  is  a  note  or  unaccepted 
bill  payable  to  the  order  of  the  maker  or  drawer,  or  is  payable  to 
bearer,  he  is  liable  to  all  parties  subsequent  to  the  maker  or 
drawer." 

Reason  for  rule  adopted  in  statute. — This  section  is  intended 
to   cover   irregular  indorsements.     On   this   subject   the   decisions 


LIABILITY   OF   PARTIES.  125 

were  very  conflicting.  In  some  jurisdictions  a  person  placing  his 
signature  on  the  back  of  a  note  before  the  payee  has  indorsed  was 
deemed  a  joint  maker.  Good  v.  Martin,  95  U.  S.  93;  National 
Exchange  Bank  v.  Cumberland  Lumber  Co.,  100  Tenn.  479;  Logan 
v.  Ogden,  101  Tenn.  392;  Bank  of  Jamaica  v.  Jefferson,  92  Tenn. 
537;  Melton  v.  Brown,  25  Fla.  461;  Schroeder  v.  Turner,  68  Md. 
506.  In  other  jurisdictions  he  was  regarded  as  a  guarantor.  In 
still  others  he  was  considered  an  indorser.  And  those  courts  which 
held  him  to  be  an  indorser  differed  as  to  whether  he  was  a  first 
or  second  indorser.  The  rule  adopted  in  the  statute  is  embodied 
in  part  in  section  3117  of  the  Civil  Code  of  California,  which 
reads:  "One  who  indorses  a  negotiable  instrument  before  it  is 
delivered  to  the  payee  is  liable  to  the  payee  thereon,  as  an  in- 
dorser." The  California  rule  was  adopted  because  it  is  conducive 
to  certainty,  and  because  it  appears  to  accord  more  nearly  with 
what  must  have  been  the  intention  of  the  parties.  When  a  plain 
man  puts  his  signature  on  the  back  of  a  negotiable  instrument  he 
ordinarily  understands  that  he  is  becoming  liable  as  an  indorser; 
and  if  he  puts  it  there  before  the  instrument  is  delivered,  he 
usually  does  so  for  the  purpose  of  giving  the  maker  or  drawer 
credit  with  the  payee  or  other  person  to  whom  it  is  negotiated. 
The  following  observation  in  Connors  v.  Taylor  (13  Wis.  224, 
229),  seems  to  embody  much  practical  good  sense:  "Obviously,  a 
person  indorsing  a  note  before  delivery  thereof  to  the  payee 
intends  rendering  himself  liable  to  the  payee  in  some  character 
and  upon  some  ground.  He  must  intend  and  design  to  secure  its 
payment  and  give  credit  to  the  paper  by  placing  his  name  upon 
it,  even  in  the  hands  of  the  payee."  In  many  of  the  cases  the 
reasoning  was  highly  technical,  and  the  decisions  were  based  upon 
considerations  which,  in  all  probability,  never  entered  the  heads 
of  the  parties  themselves.  The  California  Code  makes  no  pro- 
vision for  a  case  where  the  instrument  is  drawn  to  the  order  of 
the  maker  or  drawer.  This  is  covered  by  subdivision  2,  above. 
Subdivision  3  was  added  to  provide  for  a  case  where,  the  payee 
being  unable  to  enforce  payment,  there  might  be  a  question 
whether  the  indorser  would  be  liable  to  a  person  claiming  under 
the  payee. 

Changes  made  by  the  statute. — In  New  York  prior  to  the  stat- 
ute a  person  indorsing  in  blank  before  delivery  to  the  payee  was 
prima  facie  deemed  to  be  a  second  indorser,  and  hence  not  liable 


126  THE   NEGOTIABLE   INSTRUMENTS  LAW. 

to  the  payee,  who  was  supposed  to  be  the  first  indorser.  Bacon 
y.  Burnham,  37  N.  Y.  614;  Phelps  v.  Vischer,  50  N.  Y.  69.  The 
same  rule  prevailed  in  Pennsylvania.  Eilbert  v.  Finkbeiner,  68 
Pa.  St.  243;  Central  Nat.  Bank  v.  Dreydoppel,  134  Pa.  St.  499. 
And  in  Oregon.  Deering  v.  Creighton,  19  Oregon,  118;  Cogswell 
v.  Hayden,  5  Oregon,  22.  But  as  the  paper  itself  furnished  only 
prima  facie  evidence  of  this  intention,  it  was  competent  to  rebut 
the  presumption  by  parol  proof  that  the  indorsement  was  made 
to  give  the  maker  credit  with  the  payee.  Coulter  v.  Richmond, 
59  N.  Y.  478.  The  statute  has  changed  the  law  in  New  York, 
New  Jersey,  Pennsylvania,  Rhode  Island,  Ohio,  Missouri,  and 
other  states.  Far  Rockaway  Bank  v.  Norton,  186  N.  Y.  484; 
Haddock,  Blanchard  &  Co.,  Inc.,  v.  Haddock,  192  N.  Y.  499 ;  Wil- 
son v.  Hendee,  74  N.  J.  L.  640;  Hibbs  v.  Guaraglia,  75  N.  J.  L. 
168;  Rockfield  v.  First  Nat.  Bank  of  Springfield,  77  Ohio  St.  311; 
Deahy  v.  Choquet,  28  R.  I.  338;  Walker  v.  Dunham,  135  Mo.  App. 
390 ;  American  Trust  Co.  v.  Canevin,  184  Fed.  Rep.  657.  And  now, 
where  it  is  sought  to  hold  an  irregular  indorser,  demand  and 
notice  of  dishonor  must  be  shown  as  in  other  instances.  See  cases 
cited  above. 

Partner  indorsing  individually. — The  words  of  this  section, 
"not  otherwise  a  party,"  do  not  change  the  rule  that  a  partner 
indorsing  individually  is  a  party  different  from  the  partnership 
and  incurs  a  double  liability  arising  from  the  two  distinct  con- 
tracts by  which  he  has  bound  himself.  Fourth  Nat.  Bank  v.  Mead, 
216  Mass.  521.  In  this  case  it  was  said:  "The  act  is  designed  in 
part  as  a  codification  for  the  practical  use  of  business  men.  It 
ought  to  be  interpreted  so  as  to  be  a  help,  and  not  a  hindrance,  to 
the  easy  ascertainment  of  the  rights  and  liabilities  of  the  several 
parties  to  commercial  paper.  To  this  end  the  words  in  section 
81,  'a  person,  not  otherwise  a  party,'  must  refer  to  one  who 
appears  and  can  be  recognized  from  that  which  is  written  within 
the  four  corners  of  the  instrument  as  a  'party.'  Partnerships 
often  assume  a  style  or  designation  which  affords  no  clue  to  those 
who  are  its  members.  It  might  not  infrequently  be  a  hardship 
to  compel  the  holder  of  firm  paper  which  bears  an  indorsement 
made  before  delivery  to  ascertain  at  his  peril  whether  the  person 
making  such  indorsement  was  'otherwise  a  party  to  the  instru- 
ment' through  being  one  of  the  partnership  which  was  maker." 


LIABILITY   OP   PARTIES.  127 

Accommodation  indorser. — Under  this  section  an  indorser  who 
has  signed  for  the  accommodation  of  the  maker  before  the  paper 
was  indorsed  by  the  payee,  may  defend  upon  the  ground  of  invalid- 
ity or  want  of  consideration  in  the  same  way  that  the  maker  could 
do,  if  the  action  were  against  him.  Leonard  v.  Draper,  187  Mass. 
536. 

Parol  evidence. — This  section  does  not,  however,  fix  the  rights 
of  the  various  indorsers  as  between  themselves;  the  latter  liability 
is  governed  by  section  68  under  which  evidence  is  admissible  to 
show  an  agreement  as  to  the  order  in  which  they  shall  be  liable. 
Haddock,  Blanchard  &  Co.,  Inc.,  v.  Haddock,  192  N.  Y.  499;  S.  C. 
118  App.  Div.  412;  Kohn  v.  Consolidated  Butter  &  Egg  Co.,  30 
Misc.  (N.  Y.)  725;  Wilson  v.  Hendee,  74  N.  J.  L.  640.  But  as 
the  statute  declares  the  liability  to  be  that  of  an  indorser,  the 
holder  is  not  permitted  to  show  that  the  party  so  signing  meant 
to  bind  himself  as  guarantor.  Farquhar  Co.  v.  Highman,  16 
N.  D.  106.    See  note  to  sec.  68. 

Pleading — Burden  of  proof. — Where  the  holder  seeks  to  hold 
a  party  liable  under  this  section  he  must  allege  and  prove  that  the 
paper  was  so  indorsed  before  its  delivery,  and  the  burden  of  proof 
as  to  this  fact  is  upon  him.  Bender  v.  Bahr  Trucking  Co.,  144 
App.  Div.  (N.  Y.)  742. 

ILLUSTRATIONS. 

Note  made  by  A  payable  to  order  of  B,  indorsed  by  C,  and  after- 
ward delivered  to  B.    C  is  liable  as  indorser  to  B. 

Note  made  by  A  payable  to  order  of  himself,  indorsed  by  B,  and 
afterward  delivered  to  C.    B  is  liable  as  indorser  to  C. 

Note  made  by  A  to  order  of  B,  indorsed  by  C  before  B,  but  for 
accommodation  of  B,  and  discounted  by  Bank  of  X.  C  is  liable  as 
indorser  to  Bank  of  X  and  not  to  B. 

§  65.  Warranty  where  negotiation  by  delivery  or 
qualified  indorsement. — Every  person  negotiating  an 
instrument  by  delivery  or  by  a  qualified  indorsement, 
warrants : 

1.  That  the  instrument  is  genuine  and  in  all  respects 
what  it  purports  to  be; 

2.  That  he  has  a  good  title  to  it; 

3.  That  all  prior  parties  had  capacity  to  contract; 


128  THE   NEGOTIABLE  INSTRUMENTS   LAW. 

4.  That  he  has  no  knowledge  of  any  fact  which  would 
impair  the  validity  of  the  instrument  or  render  it  value- 
less. 

But  when  the  negotiation  is  by  delivery  only,  the 
warranty  extends  in  favor  of  no  holder  other  than  the 
immediate  transferee.  The  provisions  of  subdivision 
three  of  this  section  do  not  apply  to  persons  nego- 
tiating public  or  corporate  securities,  other  than  bills 
and  notes. 

Express  warranty. — This  section  refers,  of  course,  only  to  the 
implied  warranty.  An  express  warranty  may  be  so  framed  as  to 
exclude  all  other  warranties  which  would  otherwise  be  implied  by 
law.    Giffert  v.  West,  37  Wis.  115. 

Warranty  of  genuineness. — See  Littauer  v.  Goldman,  72  N.  Y. 
506;  Whitney  v.  National  Bank  of  Potsdam,  45  N.  Y.  303;  Her- 
rick  v.  Whitney,  15  Johns.  240 ;  Canal  Bank  v.  Bank  of  Albany,  1 
Hill,  287;  Coolidge  v.  Brigham,  5  Mete.  68.  But  if  at  the  time 
of  the  transfer  he  expressly  decline  to  warrant  the  genuineness  of 
the  instrument  no  such  warranty  will  be  implied.  Bell  v.  Dagg,  60 
N.  Y.  528.  But  a  general  refusal  to  guarantee  will  not  of  itself 
exclude  the  implied  warranty  of  genuineness.  (Id.)  The  sale  and 
transfer,  for  a  full  and  fair  price,  of  a  note  past  due,  indorsed  in 
blank  by  the  person  to  whose  order  it  is  payable,  implies  a  warranty 
by  the  vendor  that  such  indorsement  is  valid.  Giffert  v.  West,  37 
Wis.  115.     See  next  section. 

Warranty  that  instrument  is  valid. — It  will  be  noted  that  the 
warranty  mentioned  in  the  next  section,  that  the  instrument  is 
valid,  is  omitted  from  this  section.  The  inference  from  such  omis- 
sion is,  that  a  person  negotiating  commercial  paper  by  delivery 
merely,  or  by  a  qualified  indorsement,  does  not  warrant  that  it  is  an 
enforceable  contract,  as,  for  example,  that  it  is  not  void  for  usury. 
This  was  the  New  York  rule  (Littauer  v.  Goldman,  72  N.  Y.  506), 
and  while  it  has  been  criticized  and  disapproved  by  the  Supreme 
Court  of  the  United  States  (Meyer  v.  Bichards,  163  U.  S.  385),  it 
seems  to  be  the  more  convenient  rule  in  practice.  The  contrary 
rule  would  often  work  great  hardship,  and  would  make  the  busi- 
ness   of    dealing    in    commercial   paper    extremely   hazardous.      A 


LIABILITY    OF    PARTIES.  129 

broker,  for  example,  buying  and  selling  notes  and  bills,  may  assure 
himself  that  an  instrument  is  genuine,  and  that  the  parties  had 
capacity  to  contract,  but  he  could  not  always  know  the  circum- 
stances under  which  the  paper  was  made.  On  the  other  hand,  the 
New  York  rule,  which  is  conceived  to  be  the  rule  of  the  statute,  does 
no  injury  to  the  purchaser;  for  if  he  desires  a  warranty,  he  has 
only  to  exact  it,  or  to  require  the  indorsement  of  the  seller.  See 
see.  67. 

Warranty  of  title. — See  Meriden  National  Bank  v.  Gallaudet, 
120  N.  Y.  298,  303. 

Capacity  of  prior  parties. — See  Littauer  v.  Goldman,  72  N.  Y. 
506,  509.  Under  this  section  there  is  a  warranty  that  the  maker 
had  power  to  contract,  although  the  holder  knew  when  he  took  the 
paper  that  the  maker  was  a  married  woman.  In  re  Young's  Estate, 
234  Pa.  St.  287. 

Knowledge  of  fact  affecting  validity  of  paper. — Thus,  if  he  has 
knowledge  that  the  paper  is  void  for  usury,  he  will  be  liable  to  the 
purchaser.  Littauer  v.  Goldman,  72  N.  Y.  506.  But  in  such  case 
scienter  must  be  alleged  and  proved.  (Id.)  Compare  Meyer  v. 
Richards,  163  U.  S.  385 ;  Wood  v.  Sheldon,  42  N.  J.  Law,  425. 

Public  or  corporate  securities. — See  Otis  v.  Cullum,  92  U.  S. 
488.  This  was  an  action  against  the  vendor  of  municipal  bonds 
payable  to  bearer,  which  were  afterward  declared  void  because  the 
legislature  had  no  power  to  pass  the  acts  under  which  they  were 
issued.  It  was  held  that  no  recovery  could  be  had  in  the  absence 
of  an  express  warranty.  The  application  of  the  rule  of  commercial 
paper  in  such  cases  would  work  great  hardship  and  much  public 
inconvenience. 

§  66.  Liability  of  general  indorser. — Every  indorser 
who  indorses  without  qualification,  warrants  to  all  sub- 
sequent holders  in  due  course: 

1.  The  matters  and  things  mentioned  in  subdivisions 
one,  two  and  three  of  the  next  preceding  section;  and 

2.  That  the  instrument  is  at  the  time  of  his  indorse- 
ment valid  and  subsisting. 

And,  in  addition,  he  engages  that  on  due  present- 
9 


130  THE  NEGOTIABLE  INSTRUMENTS  LAW. 

ment,  it  shall  be  accepted  or  paid,  or  both,  as  the  case* 
may  be,  according  to  its  tenor,  and  that  if  it  be  dis- 
honored, and  the  necessary  proceedings  on  dishonor 
be  duly  taken,  he  will  pay  the  amount  thereof  to  the 
holder,  or  to  any  subsequent  indorser  who  may  be  com- 
pelled to  pay  it. 

Variant  readings. — In  Illinois  the  folloAving  changes  are  made: 
The  words  "  not  an  accommodating  party  "  are  interpolated  after 
"  every  indorser  "  at  the  beginning  of  the  section;  the  word 
"  four  "  is  substituted  for  "  three  "  in  the  first  subdivision;  and 
the  words  "  every  indorser  "  for  "  he  "  near  the  beginning  of 
the  last  paragraph. 

Where  paper  is  indorsed  restrictively. — As  this  and  the  pre- 
ceding section  include  the  case  of  every  indorser,  the  warranty  as 
to  genuineness  will  apply  to  one  to  whom  the  paper  has  been  in- 
dorsed restrictively,  as  for  example,  where  the  indorsement  is  "  for 
collection."  This  undoubtedly  changes  the  law ;  for  the  former  rule 
was  that  the  indorsement  of  a  bank  to  which  paper  had  been  in- 
dorsed "  for  collection  "  did  not  import  a  guaranty  of  the  genuine- 
ness of  all  prior  indorsements,  but  only  of  the  agent's  relation  to 
the  principal  as  stated  upon  the  face  of  the  paper;  and  it  was  held 
that,  in  such  a  case,  the  collecting  bank  was  not  liable  after  it  had 
paid  the  proceeds  to  its  principal,  though  a  prior  indorsement  was 
a  forgery.  United  States  v.  American  Exchange  Nat.  Bank,  70 
Fed.  Eep.  232 ;  Nat.  Park  Bank  v.  Seaboard  Nat.  Bank,  114  N.  T. 
28.  But  this  rule  was  exceedingly  inconvenient  in  practice,  and 
hence  it  was  deemed  expedient  to  make  every  indorser  a  warrantor 
of  genuineness.  There  is  no  hardship  in  this  rule,  for  each  indorser 
has  a  right  of  recourse  against  all  prior  parties.  The  former  rule, 
however,  introduced  such  an  element  of  uncertainty  that  the  clear- 
ing-house associations  throughout  the  country  adopted  rules  to  ob- 
viate its  effects,  and  the  bankers  sent  letters  to  their  customers  re- 
questing that  they  discontinue  the  use  of  the  indorsement  "  for  de- 
posit," "  for  collection,"  etc.  In  this,  as  in  several  other  instances 
where  the  law  was  changed,  the  needs  of  the  business  community 
were  deemed  of  more  importance  than  technical  principles. 

To  whom  warranty  runs. — Under  this  section,  as  under  the  rule 
of  the  law  merchant,  the  warranty  is  in  favor  of  subsequent  holders 


LIABILITY   OF   PARTIES.  131 

only,  and  since  the  adoption  of  the  statute,  as  well  as  before,  the  in- 
dorser  does  not  warrant  to  the  drawee  that  the  signature  of  the 
drawer  is  genuine.  Farmers'  and  Merchants'  Bank  v.  Bank  of 
Butherford,  115  Tenn.  64,  70-71.  Thus,  if  a  check  purporting  to 
be  drawn  by  A  should  be  indorsed  by  B  and  cashed  by  C,  the  in- 
dorsement of  B  would  be  a  warranty  in  favor  of  C,  but  not  in  favor 
of  the  bank  on  which  the  check  is  drawn. 

Warranty  as  to  genuineness,  title,  etc. — See  Leonard  v.  Draper, 
187  Mass.  536.  The  warranty  as  to  genuineness,  title  and  capacity  of 
prior  parties  (See  sec.  65),  applies  even  though  the  party  is  an  ac- 
-  commodation  indorser,  and  the  fact  was  known  to  the  holder  when 
he  took  the  instrument.    Packard  v.  Windholz,  88  App.  Div.  (N.  Y.) 
365,  aff'd  180  N.  Y.  549;  Oriental  Bank  v.  Gallo,  112  App.  Div. 
360.    The  provision  of  the  statute  refers  to  the  condition  of  the  in- 
strument on  leaving  the  hands  of  the  indorser,  and  hence,  if  the 
paper  should  be  altered  after  that  time,  and  before  delivery,  there 
is  no  warranty.    First  Nat.  Bank  v.  Gridley,  112  App.  Div.  (N.  Y.) 
398.     Thus,  where  a  note  payable  to  the  order  of  several  payees 
jointly,  was  indorsed  by  one  of  them,  and  forwarded  by  mail  to 
the  maker,  who,  before  negotiating  the  instrument,  erased  the  word 
"jointly,"  and  struck  out  the  name  of  one  of  the  payees,  and  in- 
serted his  own  in  place  thereof,  it  was  held  that  the  indorser  was 
not  liable.     (Id.)     The  indorsement  of  a  promissory  note  is  a  guar- 
anty by  the  indorser  to  the  indorsee  that  the  prior  indorsements  on 
the  note  and  the  signature  of  the  payor  are  genuine,  and  made  by 
parties  authorized  to  pass  the  title.     McConegby  v.  Kirk,  68  Pa. 
St.  200;  Condon  v.  Pearce,  43  Md.  83;  Lambert  v.  Pack,  1  Salk. 
127 ;  Critchlow  v.  Parry,  2  Camp.  182 ;  Prescott  Bank  v.  Caverly,  7 
Gray,  216,  220.  Thus,  one  who  indorses  a  promissory  note,  purport- 
ing to  be  executed  by  a  firm,  thereby  impliedly  contracts  that  the 
note  was  made  by  the  firm  in  whose  name  it  is  executed,  and  he 
cannot  dispute  the  fact  in  an  action  upon  the  indorsement.     Dal- 
rymple  v.  Hillenbrand,  62  N.  Y.  5.     And  a  second  indorser  can- 
not dispute  the  legal  capacity  of  the  payee  to  indorse  on  the  ground 
that  she  was  a  married  woman.    Prescott  Bank  v.  Caverly,  7  Gray, 
216,  217.     So,  one  indorsing  the  note  of  a  corporation  admits  its 
capacity  to  execute  the  note.     Glidden  v.  Chamberlin,  167  Mass. 
486.    But  see  Southern  Loan  Co.  v.  Morris,  2  Pa.  St.  175. 

Warranty  of  validity. — Thus,  the  indorser  may  not  set  up  as  a 

defense  that  the  instrument  was  made  on  the  Lord's  day.    Prescott 


132  THE   NEGOTIABLE  INSTRUMENTS   LAW. 

HSfat.  Bank  v.  Butler,  157  Mass.  548.  Or  that  it  is  void  as  to  the 
maker  for  usury.  Horowitz  v.  Wollowitz,  59  Misc.  (N.  Y.)  520. 
Hut  where  the  indorser  is  also  the  maker,  and  the  contract  is  void 
under  some  statute,  as,  for  example,  where  it  is  usurious,  the  war- 
ranty can  be  no  stronger  than  the  contract  itself.  Sabine  v.  Paine, 
166  App.  Div.  (N.  Y.)  9,  12. 

Certificate  of  deposit. — This  section  applies  to  one  who  indorses 
in  blank  a  certificate  of  deposit;  and  if  the  paper  is  dishonored 
owing  to  the  insolvency  of  the  bank  he  can  be  held  as  indorser. 
Jensen  v.  Wilslef,  36  Nev.  37. 

Guaranty  of  indorsements. — The  words  "indorsements  guaran- 
teed "  placed  upon  the  back  of  a  check  is  equivalent  to  a  guaranty 
of  the  genuineness  of  the  whole  of  the  instrument,  including  the 
indorsements,  excepting  only  the  signature  of  the  drawer.  N.  Y. 
Produce  Exchange  Bank  v.  Twelfth  Ward  Bank,  135  App.  Div.  52. 

Where  note  stipulates  for  attorney's  fee. — An  indorser  of  a 
promissory  note  which  contains  a  stipulation  for  a  reasonable  at- 
torney's fee  in  case  of  suit  is  as  much  liable  for  the  attorney's  fee 
as  for  the  principal  of  the  note.  Benn  v.  Kutzsckan,  24  Ore.  28. 
See  section  2. 

Individual  indorsement  of  partner. — Under  the  statute  a  part- 
ner who  indorses  a  note  made  by  the  firm  adds  to  his  liability  as 
maker  a  further  liability  as  indorser.  Nat.  Exchange  Bank  v. 
Lubrano,  29  R.  I.  64;  Fourth  Nat.  Bank  v.  Mead,  215  Mass.  521. 

Indorsement  by  executors. — Executors  have  no  power  to  bind  the 
estate  of  the  testator  by  the  contract  of  indorsement.  Packard  v. 
Dunfee,  119  App.  Div.  (N.  Y.)  599;  Schmittler  v.  Simon,  101  N. 
Y.  554.  See  also  Union  Bank  v.  Sullivan,  214  N.  Y.  332,  where 
the  indorsement  was  made  by  one  of  several  executors. 

Holder's  knowledge  of  infirmity. — As  the  new  contract  evi- 
denced by  the  indorsement  is  not  dependent  upon  the  validity  of  the 
note,  the  holder  may  hold  the  indorser  upon  his  warranty,  even 
though  he  knew  when  he  took  the  note  that  it  was  not  enforceable 
against  the  maker,  as,  for  example,  when  the  note  was  made  by  a 
corporation  and  was  ultra  vires;  First  Bank  of  Notasulga  v.  Jones, 
156  App.  Div.  (N.  Y.)  277;  or  was  made  by  a  married  woman.  In 
re  Young's  Estate,  234  Pa.  St.  287. 


LIABILITY    OF   PARTIES.  133 

Requiring  holder  to  sue  maker. — The  indorser  has  no  right  to 
require  the  holder  to  sue  the  maker  or  drawer  under  the  penalty 
of  the  indorser  being  discharged  in  case  of  non-compliance.  Day 
v.  Kidgway,  17  Pa.  St.  303.  See  also  Curtis  v.  Davidson,  215 
N.  Y.  395.  Nor  is  the  holder  bound  to  anticipate  and  make  pro- 
vision for  a  breach  of  the  contract.  Bartlett  v.  Isbell,  31  Conn. 
297. 

Parol  evidence. — Parol  evidence  of  an  agreement  which  would 
vary  the  legal  liability  of  the  indorser  under  his  indorsement  is  in- 
admissible. Smith  v.  Caro,  9  Ore.  278;  Eaton  v.  McMahon,  42 
Wis.  484.  And  while  there  has  been  some  conflict  in  the  decisions, 
the  sounder  doctrine  puts  all  indorsements  on  substantially  the  same 
footing.  The  contract  by  a  blank  indorsement  is  fixed  by  law,  and 
should  not  be  rendered  uncertain  by  parol,  any  more  than  when 
written  out  in  full.  Charles  v.  Denis,  42  Wis.  56,  58;  Torbert  v. 
Montague,  38  Colo.  325.  This  is  the  rule  adopted  in  the  statute, 
which  makes  the  indorser's  obligation  absolute.  Thus,  the  holder 
may  not  show  by  parol  that  the  liability  of  an  indorsing  payee  is 
that  of  a  maker.  Burwell  v.  Gaylord,  119  Minn.  426.  And  one 
who  indorses  without  qualification  will  not  be  permitted  to  show 
an  oral  agreement,  made  at  the  time,  that  such  indorsement  was  to 
be  without  recourse  to  him.  Aronson  v.  Nurenberg,  218  Mass.  376. 
See  section  68  and  note. 

Holder's  right  to  choose  whom  he  will  sue. — The  indorser  has 
no  right  to  require  the  holder  to  sue  the  maker  or  drawer.  Day  v. 
Ridgway,  17  Pa.  St.  303.  And,  on  the  other  hand,  the  maker  may 
not  defend  upon  the  ground  that  as  between  the  indorser  and  the 
holder  the  note  has  been  secured  or  paid.  People's  Nat.  Bank  v. 
Eice,  149  App.  Div.  (N.  Y.)  18. 

§  67.  Liability  of  indorser  where  paper  negotiable 
by  delivery. — Where  a  person  places  his  indorsement 
on  an  instrument  negotiable  by  delivery  he  incurs  all 
the  liabilities  of  an  indorser. 

Rule  at  common  law. — This  section  makes  no  change  in  the  law. 
Cover  v.  Meyers,  75  Md.  406. 

Holder's  right  of  election. — The  holder  of  paper  payable  to 
bearer  and  indorsed  may  sue  upon  »■*  as  bearer  or  indorser  at  his 


134  THE   NEGOTIABLE  INSTRUMENTS   LAW. 

election.    Daniel  on  Negotiable  Instruments,  section  663a;  3  Kent's 
Comm.  44. 

Negotiation  of  paper  so  indorsed. — Formerly  in  some  states  a 
note  payable  to  a  designated  payee  or  bearer  could  not  be  negotiated 
except  by  the  indorsement  of  such  person.  See  Garvin  v.  Wiswell, 
83  111.  218;  Blackman  v.  Lehman,  63  Ala.  547.  But  by  section  40 
of  the  Negotiable  Instruments  Law  an  instrument  payable  to  bearer 
and  indorsed  specially  may  be  further  negotiated  by  delivery. 

§  68.  Order  in  which  indorsers  are  liable. — As  re- 
spects one  another  indorsers  are  liable  prima  facie  in 
the  order  in  which  they  indorse;  but  evidence  is  ad- 
missible to  show  that  as  between  or  among  themselves 
they  have  agreed  otherwise.  Joint  payees  or  joint  in- 
dorsees who  indorse  are  deemed  to  indorse  jointly  and 
severally. 

Variant  readings.— In  Illinois,  for  the  last  sentence  of  the  sec- 
tion, the  following  is  substituted:  "All  parties  jointly  liable  on  a 
negotiable  instrument  are  deemed  to  be  jointly  and  severally 
liable." 

Accommodation  indorsers.— This  rule  is  general,  and  applies  to 
accommodation  indorsers  as  well  as  to  others.  Such  indorsements 
import,  not  a  joint,  but  a  several  and  successive,  liability,  each  in- 
dorser  being  responsible  to  all  who  succeed  him.  Easterly  v.  Bar- 
ber, 66  N.  Y.  433;  Kelly  v.  Burroughs,  102  N.  Y.  93;  Egbert  v. 
Hanson,  34  Misc.  597;  McCarty  v.  Koots,  21  How.  (U.  S.)  432; 
Bank  of  U.  S.  v.  Beirne,  1  Gratt.  234 ;  Hague  v.  Davis,  8  Gratt.  4 ; 
Shaw  v.  Knox,  98  Mass.  214;  McDonald  v.  Magruder,  3  Peters, 
470;  Wood  v.  Kepold,  3  Harris  &  J.  125;  Clapp  v.  Eice,  13  Gray, 
403 ;  Howe  v.  Merrill,  15  Gush.  88 ;  Talcott  v.  Cogswell,  3  Day,  512 ; 
Kirschner  v.  Conklin,  40  Conn.  77,  81;  Wolf  v.  Hostetter,  182  Pa. 
St.  292;  Russ  v.  Sadler,  197  Pa.  St.  51;  Bamford  v.  Boynton, 
200  Mass.  560.  The  mere  fact,  then,  that  indorsers  are  accommo- 
dation parties  and  known  to  one  another  to  be  such  does  not 
overcome  the  prima  facie  presumption,  but  for  this  purpose  it 
is  necessary  to  show  a  special  agreement.  In  re  McCord,  174  Fed. 
Rep.  72. 


LIABILITY   OF   PARTIES.  135 

Proof  of  special  agreement. — See  Morrison  Lumber  Co.  v.  Look- 
out Mt.  Hotel  Co.,  92  Tenn.  6;  Bank  of  Jamaica  v.  Jefferson,  92 
Tenn.  537;  Reinhart  v.  Schall,  G9  Md.  352;  Hale  v.  Danforth,  46 
Wis.  554;  Witherow  v.  Slaybach,  158  N.  Y.  649;  Patch  v.  Washburn, 

82  Mass.  82;  Breneman  v.  Furniss,  90  Pa.  St.  186.  Evidence  to  show 
an  agreement  for  a  joint  liability;  Easterly  v.  Barber,  60  V.  Y. 
433;  Phillips  v.  Preston,  5  How.  (U.  S.)  278;  Edelen  v.  White,  6 
Bush.  408;  contra,  Johnson  v.  Ramsay,  43  N.  J.  Law,  279.  Evi- 
dence to  show  contract  that  one  was  to  be  prior  indorser.  Slack  v. 
Kirk,  67  Pa.  St.  380;  Reinhart  v.  Schall,  69  Md.  352;  Slagel  v. 
Rust,  4  Gratt.  274.  For  a  case  where  relief  given  in  equity  where 
order  of  indorsers  changed  on  renewal  of  note  without  consent  of 
one;  see  Slagel  v.  Rusts'  Admr.,  4  Gratt.  274.  The  statute  has 
changed  the  law  in  New  Jersey.  Morgan  v.  Thompson,  72  N.  J. 
L,  244,  246. 

Agreement  inferred  from  circumstances. — To  overcome  the 
prima  facie  presumption  created  by  this  section  it  is  not  necessary 
that  there  shall  be  proof  of  an  actual  formal  contract  in  so  many 
words;  but  it  is  sufficient  if,  taking  all  the  circumstances  into  ac- 
count, the  nature  of  the  liability  appears,  which  as  between  them- 
selves the  indorsers  intended  to  assume.  Weeks  v.  Parsons,  179 
Mass.  570,  575 ;  Clapp  v.  Rice,  13  Gray,  403 ;  Hagerthy  v.  Phillips, 

83  Me.  336 ;  MacDonald  v.  Whitfield,  L.  R.  8  App.  Cas.  733.  Thus, 
where  the  members  of  a  stranded  theatrical  company  indorsed  a 
note  for  the  purpose  of  raising  money  to  enable  them  to  get  home, 
and  all  were  equally  benefitted,  a  prior  indorser  who  had  been 
compelled  to  pay  the  note  was  held  to  be  entitled  to  contribution 
from  the  other  indorsers.  George  v.  Bacon,  138  App.  Div.  (N.  Y.) 
208.  So,  where  the  stockholders  of  a  corporation  indorsed  a  note 
to  enable  the  corporation  to  continue  in  business,  it  was  held  that 
they  were,  as  among  themselves,  equally  liable,  though  there  was  no 
proof  of  an  agreement  to  that  effect.  Trego  v.  Cunningham's  Es- 
tate, 267  111.  367. 

Parol  evidence. — Under  this  section  the  agreement  of  the  in- 
dorsers as  to  their  liability  respecting  one  another  may  be  shown 
by  parol.  Wilson  v.  Hendee,  74  N.  J.  L.  640;  Hunter  v.  Harris, 
63  Ore.  505;  Noble  v.  Breemen-Spaulding  Co.,  65  Ore.  93;  Gold- 
man v.  Goldberger,  208  Fed.  Rep.  877.  Thus,  in  an  action  brought 
by  one  indorser  of  a  note  against  one  of  the  two  other  indorsers,  the 
defendant  was  allowed  to  show  that  the  indorsements  were  for  ac- 


\ 


136  THE   NEGOTIABLE  INSTRUMENTS  LAW. 

commodation,  and  that  by  an  oral  agreement  among  the  indorsers 
his  liability  was  in  no  event  to  exceed  one-third  of  the  amount  at 
any  time  due  on  the  note.  Shea  v.  Vahey,  215  Mass.  80.  See  also 
Union  Bank  v.  Sullivan,  214  N.  Y.  332.  And  the  rule  which  per- 
mits the  receipt  of  parol  evidence  to  determine  the  question  of  lia- 
bility as  between  those  who  are  secondarily  liable  applies  to  the 
drawer  of  a  bill.  Haddock,  Blanchard  &  Co.  v.  Haddock,  192  N.  Y. 
499.  In  the  case  last  cited  the  court  said:  "As  we  have  seen, 
upon  the  acceptance  of  the  bill  the  acceptor  becomes  the  prin- 
cipal debtor  and  the  one  primarily  liable  to  pay  the  amount  of 
the  bill,  and  all  other  parties  to  the  instrument,  including  the 
maker  and  indorser,  are  secondarily  liable.  We  are  of  the  opinion 
that  the  maker  [drawer]  of  the  bill  is  in  legal  effect  and  within 
the  intention  of  this  section  an  indorser,  and  that  as  between 
the  plaintiff  and  the  defendant,  parol  evidence  is  authorized  to 
determine  the  liability  as  between  them." 

Joint  payee  indorsing. — This  provision  changes  the  law.  Prior 
to  the  statute  joint  payees  who  indorsed  were  liable  only  jointly. 
Lane  v.  Stacy,  8  Allen,  41;  Daniel  on  Negotiable  Instruments,  sec- 
tion 704. 

Suit  against  one  joint  indorser. — Under  this  section,  an  action 
lies  against  one  joint  indorser  without  joining  the  others.  Hod- 
gens  v.  Jennings,  148  App.  Div.   (N.  Y.)  879. 

§  69.  Liability  of  agent  or  broker. — Where  a  broker 
or  other  agent  negotiates  an  instrument  without  in- 
dorsement, he  incurs  all  the  liabilities  prescribed  by 
section  sixty-five  of  this  act,  unless  he  discloses  the 
name  of  his  principal,  and  the  fact  that  he  is  acting 
only  as  agent. 

Variant  readings. — In  Illinois  a  new  section  is  interpolated  at 
this  place  as  69a.  "  Whenever  any  bill  of  exchange  drawn  or  in- 
dorsed within  this  state  and  payable  without  this  state,  is  duly 
protested  for  non-acceptance  or  non-payment,  the  drawer  or  in- 
dorser thereof,  due  notice  being  given  of  such  non-acceptance  or 
non-payment,  shall  pay  such  bill  at  the  current  rate  of  exchange 
and  with  legal  interest  from  the  time  such  bill  ought  to  have  been 
paid  until  paid,  together  with  the  costs  and  charges  of  protest, 


LIABILITY    OF   PARTIES.  137 

and  on  bills  payable  in  the  United  States  in  case  suit  has  to  be 
brought  thereon  and  on  bills  payable  without  the  United  States 
with  or  without  suit,  five  per  cent,  damages  in  addition." 

Rule  at  Common  law. — See  Meriden  National  Bank  v.  Gallaudet, 
120  N.  Y.  289;  Cabot  Bank  v.  Morton,  4  Gray,  156;  Worthington 
v.  Cowles,  12  Mass.  30. 


138  THE  NEGOTIABLE  INSTRUMENTS  LAW. 


ARTICLE  VII. 

Presentment  for  Payment. 

Section  70.  When    presentment    necessary — effect    of 
failure  to  present. 

71.  Where   not   payable   on   demand — where 

payable  on  demand. 

72.  What  constitutes  a  sufficient  presentment. 

73.  Place  of  presentment. 

74.  Instrument  must  be  exhibited. 

75.  Presentment  where  instrument  payable  at 

bank. 

76.  Where  person  primarily  liable  is  dead. 

77.  Presentment  to  persons  liable  as  partners. 

78.  Presentment  to  joint  debtors. 

79.  When  presentment  not  required  to  charge 

the  drawer. 

80.  When  presentment  not  required  to  charge 

the  indorser. 

81.  When  delay  in  making  presentment  is  ex- 

cused. 

82.  When  presentment  may  be  dispensed  with. 

83.  When  instrument  dishonored  by  non-pay- 

ment. 

84.  Right  of  recourse  to  parties  secondarily 

liable. 

85.  Time  of  maturity. 

86.  How  time  computed. 

87.  Instrument  payable  at  bank — effect  of. 

88.  What  constitutes  payment  in  due  course. 


PRESENTMENT   FOR   PAYMENT.  139 

§  70.  When  presentment  necessary — effect  of  failure 
to  present. — Presentment  for  payment  is  not  necessary 
in  order  to  charge  the  person  primarily  liable  on  the  in- 
strument ;  but  if  the  instrument  is,  by  its  terms,  payable 
at  a  special  place,  and  he  is  able  and  willing  to  pay  it 
there  at  maturity,  such  ability  and  willingness  are 
equivalent  to  a  tender  of  payment  upon  his  part.  But 
except  as  herein  otherwise  provided,  presentment  for 
payment  is  necessary  in  order  to  charge  the  drawer 
and  indorsers. 

Variant  readings. — In  Illinois  the  words  "except  in  case  of 
bank  notes"  are  interpolated  after  the  words  "primarily  liable" 
on  the  instrument."  In  Wisconsin  all  after  the  words  "  primarily 
liable  "  in  the  first  sentence  to  the  end  of  that  sentence  are  omit- 
ted. In  the  New  York  Statute  the  words  "and  nas  funds  there 
available  for  that  purpose"  after  the  word  "maturity"  in  the 
first  sentence,  were  interpolated  by  Laws  N.  Y.  1898,  chap.  336. 
They  seem  to  be  superfluous.  It  is  difficult  to  see  how  a  man  can 
be  able  to  pay,  unless  he  has  the  funds  with  which  to  make  pay- 
ment. Besides,  if  taken  literally,  they  impose  a  condition  not 
deemed  necessary  by  the  courts.  If,  for  example,  the  "special 
place"  where  the  paper  is  payable  is  the  office  of  the  maker  or  ac- 
ceptor, this  provision  requires  that  he  have  the  funds  there,  and  it 
would  not  be  enough  that  he  have  them  in  bank.  The  interpola- 
tion is  not  only  at  variance  with  the  decisions  on  the  subject,  but 
is  contrary  to  good  sense,  and  to  the  practice  of  the  business 
world.  The  change  was  made  without  the  knowledge  of  the  Com- 
missioners on  Uniformity  of  Laws.  It  affords  a  good  illustration 
of  the  absurdities  likely  to  result  from  legislative  "tinkering." 
The  same  change  has  been  made  in  Kansas  and  Ohio. 

Liability  of  maker  or  acceptor. — The  rule  was  well  established 
that  presentment  was  not  necessary  to  charge  the  maker  or  ac- 
ceptor. See  Wright  v.  Vermont  Ins.  Co.,  164  Mass.  302;  Payson 
v.  Whitcomb,  15  Pick.  212;  Howard  v.  Boorman,  17  Wis.  459 
Rumball  v.  Ball,  10  Md.  38;  Frampton  v.  Coulson,  1  Wils.  33 
Norton  v.  Ellam,  2  M.  &  W.  461;  Hills  v.  Place,  48  N.  Y.  520, 
Bush  v.  Gilmore,  45  App.  Div.  (N.  Y.)  89.  And  this  was  so  though 
the  paper  was  by  its  terms  payable  "upon  demand,"  for  these 


140  THE   NEGOTIABLE   INSTRUMENTS   LAW. 

words  do  not  make  the  demand  a  condition  precedent  to  a  right 
of  action,  but  import  that  the  debt  is  due  and  demandable  imme- 
diately, or  at  least  that  the  commencement  of  a  suit  therefor  is 
a  sufficient  demand.  Dominion  Trust  Co.  v.  Hildner,  243  Pa.  St. 
253;  Swearingen  v.  Sewickley  Dairy  Co.,  198  Pa.  St.  68;  Church 
v.  Stevens,  56  Misc.  (N.  Y.)  572.  The  rule  is  general,  and  applies 
though  the  maker  has  made  the  note  for  accommodation  and  this 
is  known  to  the  holder.  Hansborough  v.  Gray,  3  Gratt.  340.  For 
cases  arising  under  the  statute,  see  Farmers'  Nat.  Bank  v.  Ven- 
ner,  192  Mass.  531,  534;  Florence  Oil  Co.  v.  First  Nat.  Bank,  38 
Colo.  119;  Dewees  v.  Middle  States  Coal  &  Iron  Co.,  248  Pa.  St. 
202. 

Paper  payable  at  a  particular  place.— The  rule  adopted  gener- 
ally in  the  United  States  was  that  where  a  note  is  made  payable 
at  a  particular  bank  or  other  place,  or  a  bill  of  exchange  is  drawn 
or  accepted  payable  in  like  manner,  it  is  not  necessary  in  order 
to  recover  of  the  maker  or  acceptor  to  aver  or  prove  presentment 
or  demand  of  payment  at  such  place  on  the  day  the  instrument 
became  due  or  afterward.  The  only  consequence  of  a  failure  to 
make  such  presentment  is  that  the  maker  or  acceptor,  if  he  was 
ready  at  the  time  and  place  to  make  the  payment,  may  plead  the 
matter  in  bar  of  damages  and  costs.  Hills  v.  Place,  48  N.  Y. 
520,  523;  Parker  v.  Stroud,  98  N.  Y.  379,  384;  Cox  v.  National 
Bank,  100  U.  S.  713;  Wallace  v.  McConnell,  13  Peters,  136;  La- 
zier v.  Horan,  55  Iowa,  77;  Insurance  Company  v.  Wilson,  29 
W.  Va.  543;  Lockwood  v.  Crawford,  18  Conn.  361;  Bond  v. 
Storrs,  13  Conn.  416. 

Where  holder  has  election.— Where,  by  the  terms  of  the  instru- 
ment, the  holder  has  the  option  to  declare  the  principal  sum  due 
upon  default  in  the  payment  of  interest  he  must  prove  present- 
ment and  notice  in  order  to  hold  an  indorser.  Galbraith  v.  Skep- 
ardfl  43  Wash.  698.  See  also  Bardsley  v.  Washington  Mill  Co., 
54  Wash.  553. 

Place  of  contract. — Where  a  draft  is  drawn  in  another  state, 
by  one  residing  there,  upon  a  person  residing  in  New  York,  any 
legal  question  in  reference  to  presentation  and  demand  for  pay- 
ment is  to  be  determined  by  the  laws  of  New  York.  Sylvester 
v.  Crohan,  138  N.  Y.  494;  Hibernia  Bank  v.  Lacomb,  84  N.  Y. 
367.     As  to  presentment  of  a  bill  drawn  in  New  York  upon  a 


PRESENTMENT   FOE   PAYMENT.  141 

person  doing  business  in  a  foreign  country,  see  Amsinck  v.  Rog- 
ers, 189  N.  Y.  252. 

Where  indorser  holds  security. — The  fact  that  the  indorser 
holds  security  to  indemnify  him  against  loss  upon  his  indorse- 
ment does  not  dispense  with  the  necessity  for  presentment  for 
payment  and  notice  of  dishonor.  First  Nat.  Bank  of  Binghamton 
v.  Baker,  163  App.  Div.  (N.  Y.)  72;  Whitney  v.  Collins,  15  R.  I. 
44. 

§  71.  Where  not  payable  on  demand — where  payable 
on  demand. — Where  the  instrument  is  not  payable  on 
demand,  presentment  must  be  made  on  the  day  it  falls 
due.  Where  it  is  payable  on  demand,  presentment 
must  be  made  within  a  reasonable  time  after  its  issue, 
except  that  in  the  case  of  a  bill  of  exchange,  presentment 
for  payment  will  be  sufficient  if  made  within  a  reason- 
able time  after  the  last  negotiation  thereof. 

Variant  readings. — In  Nebraska  all  after  the  word  "  issue  "  in 
the  second  sentence  is  omitted.  In  Vermont  the  words  "  its  issue 
in  order  to  charge  the  drawer  "  are  substituted  for  the  words 
"  last  negotiation  thereof." 


■'Ov 


Changes  made  by  the  statute. — This  section  changed  the  law 
of  New  York,  which  prior  to  the  statute  was,  that  a  promissory 
note  payable  on  demand  with  interest  was  a  continuing  security, 
on  which  an  indorser  remained  liable  until  an  actual  demand,  and 
the  holder  was  not  chargeable  with  neglect  for  omitting  to  make 
such  demand  within  any  particular  time.  Merritt  v.  Todd,  23  N. 
Y.  28;  Pardee  v.  Fish,  60  N.  Y.  265;  Herrick  v.  Wolverton,  41 
N.  Y.  581;  Wheeler  v.  Warner,  47  N.  Y.  519;  Crim  v.  Stark- 
weather, 88  N.  Y.  339;  Parker  v.  Stroud,  98  N.  Y.  379,  385;  Shutts 
v.  Fingar,  100  N.  Y.  541.  The  object  intended  to  be  accomplished 
by  the  statute  was  to  do  away  with  the  distinction  between  notes, 
or  bills,  payable  on  demand,  which  Merritt  v.  Todd  had  created, 
and  to  leave  the  question  of  their  reasonable  presentment  for  pay- 
ment, in  order  to  charge  the  parties  to  them,  as  one  for  the  de- 
termination of  the  court  upon  the  facts.  Commercial  Nat.  Bank 
v.  Zimmerman,  185  N.  Y.  310.  In  Connecticut,  prior  to  the  Nego- 
tiable Instruments  Law,  promissory  notes  payable  on  demand  were 


142  THE   NEGOTIABLE   INSTRUMENTS  LAW. 

required  to  be  presented  within  four  months.  Connecticut  Gen- 
eral Statutes,  p.  405.  But  the  later  statute  restores  the  rule  of 
the  common  law  as  it  formerly  existed  in  that  state.  Hampton 
v.  .Miller,  78  Conn.  267,  271-272.  A  similar  rule  prevailed  in  Min- 
nesota (Minnesota  statutes  [1891],  section  2104).  In  Massachu- 
setts and  Vermont  demand  notes  were  overdue  in  sixty  days. 
Merritt  v.  Jackson,  181  Mass.  67;  Paine  v.  Central  Vermont  R. 
R.  Co.,  118  U.  S.  152.  As  to  a  note  payable  on  demand,  "with 
interest  semi-annually,"  see  Hayes  v.  Werner,  45  Conn.  252. 

Reasonable  time — What  is. — One  of  the  most  difficult  questions 
presented  for  the  decision  of  a  court  is,  what  shall  be  deemed  a 
reasonable  time  within  which  to  demand  payment  of  the  maker  of 
a  note  payable  on  demand,  in  order  to  charge  the  indorser.  It 
depends  upon  so  many  circumstances  to  determine  what  is  a  rea- 
sonable time  in  a  particular  case,  that  one  decision  goes  but  little 
way  in  establishing  a  precedent  for  another.  Scavor  v.  Lincoln, 
21  Pick.  267.  If  the  facts  are  disputed  and  the  testimony  con- 
flicting, the  question  is  a  mixed  one  of  law  and  fact,  to  be  de- 
cided by  the  jury,  under  the  instructions  of  the  court,  but  where 
the  facts  are  not  in  dispute  the  question  is  one  of  law.  Commer- 
cial Nat.  Bank  v.  Zimmerman,  185  N.  Y.  310;  German  Am.  Bank 
v.  Mills,  99  App.  Div.  (N.  Y.)  312;  In  re  Philpott's  Estate,  151 
N.  W.  Rep.   (Iowa)   825;  Guild  v.  Goldsmith,  9  Fla.  212. 

Decisions  under  the  statute. — Under  this  section  it  has  been  held 
that  a  note  payable  on  demand  should  be  treated  as  due  four 
months  after  its  date.  Frazee  v.  Phoenix  Nat.  Bank,  161  Ky.  175. 
The  court  said:  "The  question  is  under  the  terms  and  the  spirit 
of  the  act,  when  should  there  have  been  a  presentment  for  pay- 
ment and  notice  of  dishonor.  It  is  a  matter  of  common  knowledge 
that  in  the  banks  of  central  Kentucky  commercial  paper  is  rarely 
permitted  to  run  longer  than  four  months  without  renewal.  It 
may  be  said  to  be  a  custom  or  usage  of  trade  that  such  paper  is 
ordinarily  payable  within  that  time,  and  being  the  usage  of  trade, 
this  note  should  have  been  treated  as  due  at  least  on  the  20th  day 
of  December,  1908."  In  Massachusetts  it  is  held,  under  this  sec- 
tion, that  in  the  absence  of  any  evidence  to  show  a  usage  of  trade 
or  business  to  the  contrary,  a  demand  note  must  be  presented 
within  sixty  days  in  order  to  hold  an  indorser.  Merritt  v.  Jack- 
son, 181  Mass.  67. 


PRESENTMENT   FOR  PAYMENT.  143 

Paper  overdue. — As  by  section  7  an  instrument  negotiated 
when  overdue  is  paj^able  on  demand,  the  requirement  of  section 
71  is  applicable  in  such  cases.  In  theory  paper  indorsed  when 
overdue  is  equivalent  to  a  bill  of  exchange  drawn  on  the  party 
primarily  liable,  payable  at  sight.  In  this  theory  the  necessity 
of  demand  and  notice  is  an  essential  element;  not  notice  on  a 
given  day,  as  in  the  case  of  a  maturing  note,  possible  in  that  case, 
but  impossible  in  the  other,  for  the  day  appointed  by  the  former 
maker  and  the  new  acceptor  has  passed;  but  notice  after  the 
holder  has  had  reasonable  time  to  make  the  demand  on  tbe  maker, 
and  has  employed  that  time  with  diligence.  Tyler  v.  Young,  30 
Pa.  St.  143,  144;  Leidy  v.  Tammany,  9  Watts,  353;  Guild  v.  Gold- 
smith, 9  Fla.  212. 

Request  of  indorser. — A  note,  presented  in  accordance  with  the 
request  or  assent  of  the  indorser,  is,  as  to  him,  presented  in  a 
reasonable  time.    Oley  v.  Miller,  74  Conn.  304,  308. 

On  demand  after  date. — A  note  payable  "on  demand  after 
date"  is  a  demand  note,  and  not  one  payable  on  a  fixed  day, 
and  hence,  it  need  only  be  presented  for  payment  within  a  rea- 
sonable time.     Schlesinger  v.  Schultz,  110  App.  Div.  (N.  Y.)  356. 

Demand  with  tender. — Where  a  note  is  payable  "on  demand 
and  upon  security  given,"  the  making  of  a  demand  accompanied 
by  a  tender  of  the  securities  is  not  a  condition  precedent  to  the 
maintenance  of  an  action  to  recover  upon  the  note,  but  it  is  suf- 
ficient for  the  plaintiff  to  produce  and  tender  the  note  and  the 
securities  upon  the  trial.  Spencer  v.  Drake,  84  App.  Div.  (N.  Y.) 
272.  As  to  corporate  bonds  and  coupons,  see  Williamsport  Gas 
Co.  v.  Pinkerton,  95  Pa.  St.  62. 

Pleading. — The  defense  that  the  paper  was  not  presented  within 
a  reasonable  time  after  its  issue  need  not  be  specially  pleaded  by 
an  indorser;  for,  since  the  obligation  of  the  indorser  is  condi- 
tional upon  all  the  steps  having  been  taken  by  the  holder  which 
the  statute  has  prescribed  as  to  presentment  and  as  to  notice  of 
non-payment,  the  burden  is  on  the  holder  to  prove  due  and  timely 
presentment.  Commercial  Nat.  Bank  v.  Zimmerman,  185  N.  Y. 
210.  The  case  last  cited  overrules  German  Am.  Bank  v.  Mills, 
99  App.  Div.  (N.  Y.)  312,  315,  where  it  was  held  that  this  section 
of  the  Negotiable  Instruments  Law  creates  a  statute  of  limita- 


144  THE   NEGOTIABLE  INSTRUMENTS  LAW. 

tions  which  must  be  pleaded.  For  other  cases  applying  the  stat- 
ute, see  Schlesinger  v.  Sehultz,  110  App.  Div.  (N.  Y.)  356;  Citi- 
zens' Bank  v.  First  Nat.  Bank,  135  Iowa,  C85. 

Kule  where  check  is  negotiated. — The  provision  of  this  section, 
that  in  the  case  of  a  bill  presentment  may  be  made  within  a  rea- 
sonable time  after  the  last  negotiation  thereof,  applies  to  the  in- 
dorser  of  a  check.  Columbian  Banking  Co.  v.  Bowen,  134  Wis.  218. 
In  the  case  cited  the  court  said:  "  Keeping  in  mind  that  the  dis- 
charge from  liability  above  referred  to  because  of  unreasonable  de- 
lay after  the  issuance  of  a  check  in  presenting  it  for  payment,  is  of 
the  drawer  only,  and  that  this  action  is  against  the  payee  who 
indorsed  the  instrument  in  question  without  qualification  and  put 
it  in  circulation,  we  turn  to  section  1678-1,  which  provides,  as  to 
a  bill  of  exchange  payable  on  demand,  which  from  the  foregoing 
obviously  includes  a  check  or  draft  on  a  bank  of  the  character 
of  the  one  in  question,  'presentment  for  payment  will  be  sufficient 
if  made  within  a  reasonable  time  after  the  last  negotiation 
thereof.'  From  the  foregoing  it  seems  plain  that,  as  regards  the 
payee  of  such  an  instrument  as  we  have  here,  who  puts  the  same 
in  circulation  with  his  unqualh'ed  indorsement  thereon,  and  all 
subsequent  parties  thereto  so  indorsing  the  same,  presentment 
for  payment  is  sufficient,  as  regards  their  liability,  if  made  within 
a  reasonable  time  after  the  last  negotiation.  A  bill  of  exchange 
payable  on  demand,  regardless  of  its  character,  put  in  circulation, 
so  long  as  its  circulating  character  is  preserved  may  be  outstand- 
ing without  impairing  the  liability  of  indorsers  thereof.  Formerly, 
the  length  of  time  within  which  a  bill  of  exchange  might  circulate 
without  impairing  such  liability  was  more  or  less  uncertain, 
rendering  it  very  difficult  to  determine  any  one  case  by  the  de- 
cision in  another.  That  difficulty  was  removed,  so  far  as  prac- 
ticable, by  the  provision  that  only  the  time  need  be  considered 
intervening  between  the  last  negotiation  and  the  presentment. 
That  is  recognized  as  a  radical  change  in  the  law  as  it  formerly 
existed."  See  also  Singer  Manufacturing  Co.  v.  Summers,  143 
N.  C.  103;  Citizens'  Nat.  Bank  v.  First  Nat.  Bank,  135  Iowa,  605; 
Plover  Savings  Bank  v.  Moodie,  135  Iowa,  685.  In  the  case  last 
cited  it  was  said:  "The  checks  were  negotiated  by  the  appellee 
to  the  Des  Moines  Savings  Bank,  and  under  the  statute  already 
quoted  (Code  Supp.  1902,  §§  3060a-71),  reasonable  time  for  pre- 
sentation and  demand  is  to  be  reckoned  from  the  last  negotiation 


PRESENTMENT   FOR    PAYMENT.  145 

of  the  paper.  Cheeks  are  an  almost  universal  substitute  for 
money.  They  pass  from  hand  to  hand,  bank  to  bank,  and  city 
to  city,  and  within  reasonable  limits,  it  may  be  said  that  no 
matter  how  long  they  remain  outstanding,  so  long  as  one  nego- 
tiation promptly  follows  another  and  the  checks  are  in  fact  in 
circulation  the  statute  requires  us  to  hold  that  the  indorser  is 
not  legally  prejudiced  by  the  consequent  delay  in  their  presenta- 
tion for  payment." 

Negotiation  to  payee's  agent. — Where  the  payee  negotiates  the 
check  to  his  own  agent  the  failure  of  the  agent  to  present  the 
check  is  the  payee's  own  neglect.  Gordon  v.  Levine,  194  Mass. 
418. 

Certificate  of  deposit. — This  section  is  applicable  to  a  certificate 
of  deposit  payable  upon  demand,  and  presentment  of  such  a  cer- 
tificate within  a  reasonable  time  after  its  issue  must  be  made  in 
order  to  charge  an  indorser  thereon.  Anderson  v.  First  Nat. 
Bank  of  Charlton,  144  Iowa,  251.  But  in  the  case  of  a 
certificate  of  deposit  there  is  much  reason  for  saying  that 
the  parties  do  not  contemplate  an  immediate  demand  of  payment, 
and  hence  an  indorsee  may  not  be  held  to  the  same  degree  of 
diligence  in  presenting  it  for  payment  as  the  law  requires  in 
other  eases.    Lindsel  v.  McClellan,  18  Wis.  481. 

Discharge  of  drawer  by  delay. — As  respects  discharge  of  the 
drawer  by  delay  in  making  presentment,  see  section  186  and  note. 

§  72.  What  constitutes  a  sufficient  presentment. — 
Presentment  for  payment,  to  be  sufficient,  must  be 
made: 

1.  By  the  holder,  or  by  some  person  authorized  to 
receive  payment  on  his  behalf; 

2.  At  a  reasonable  hour  on  a  business  day; 

3.  At  a  proper  place  as  herein  defined; 

4.  To  the  person  primarily  liable  on  the  instrument, 
or  if  he  is  absent  or  inaccessible,  to  any  person  found 
at  the  place  where  the  presentment  is  made. 

Evidence  of  authority  to  make  presentment. — The  mere  posses- 
sion of  a  negotiable  instrument  which  is  payable  to  the  order  of 

10 


14G  THE   NEGOTIABLE  INSTRUMENTS  LAW. 

the  payee,  and  is  indorsed  by  him  in  blank,  or  of  a  negotiable 
instrument  payable  to  bearer,  is  in  itself  sufficient  evidence  of  the 
right  to  present  it  and  to  demand  payment  thereof.  Weber  v. 
Orton,  91  Mo.  680;  Sussex  Bank  v.  Baldwin,  2  Harr.  (N.  J.)  487; 
Shedd  v.  Brett,  1  Pick.  401.  And  payment  to  such  person  will 
always  be  valid,  unless  he  is  known  to  the  payer  to  have  acquired 
possession  wrongfully.  Daniel  on  Negotiable  Instruments,  section 
574.  There  is  no  need  of  a  power  of  attorney  or  written  instru- 
ment to  constitute  one  an  agent  for  this  purpose.  Shedd  v.  Brett, 
1  Pick.  401.  But  the  mere  possession  of  an  instrument  payable 
to  order  and  not  indorsed  by  the  payee  is  not  alone  sufficient  evi- 
dence of  the  authority  of  an  assumed  agent  to  receive  payment. 
Doubleday  v.  Kress,  50  N.  Y.  410.  Where  a  bank  holding  a  note 
for  collection  sends  it  for  the  same  purpose  to  the  bank  where  it 
is  payable,  the  latter  is  authorized  to  demand  payment  and  give 
notice  of  dishonor.    Blakeslee  v.  Hewitt,  16  Wis.  341. 

Time  of  day. — Except  in  cases  where  the  instrument  is  payable 
at  a  bank,  the  holder  has  the  whole  day  in  which  to  present  the 
same,  the  only  limitation  being  that  he  must  present  it  at  a  rea- 
sonable hour,  and  this  may  depend  upon  the  circumstances  of  the 
case.  Salt  Springs  National  Bank  v.  Burton,  58  N.  Y.  430 ;  Farns- 
worth  v.  Allen,  4  Gray,  453;  Barclay  v.  Bailey,  2  Camp.  527;  Wil- 
kins  v.  Jadis,  2  B.  &  Ad.  188.  As  late  as  nine  o'clock  in  the 
evening  has  been  held  to  be  a  reasonable  hour.  Farnsworth  v. 
Allen,  4  Gray,  453.  But  it  is  only  when  presentment  is  at  the 
residence  that  the  time  is  extended  into  the  hours  of  rest.  If  it 
is  payable  at  the  place  of  business  it  must  be  presented  during 
those  business  hours  when  such  places  are  customarily  open,  or,  at 
least,  while  some  one  is  there  competent  to  give  an  answer.  Waring 
v.  Betts,  90  Va.  46,  53.  As  to  when  instruments  payable  at  bank 
must  be  presented,  see  section  75. 

Presentment  by  bank. — Presentment  by  a  bank  having  the  paper 
for  collection  is  sufficient.  Fowler  Paper  Co.  v.  Bert  Jones  S. 
B.  Co.,  183  111.  App.  310. 

Place  of  presentment. — As  to  what  is  a  proper  place,  see  next 
section. 

Presentment  to  person  on  premises.— As  to  this,  see  Cromwell 
v.  Hynson,  2  Camp.  596;  Phillips  v.  Astberg,  2  Taunt.  206. 


PRESENTMENT   FOR   PAYMENT.  147 

§  73.  Place  of  presentment. — Presentment  for  pay- 
ment is  made  at  the  proper  place : 

1.  Where  a  place  of  payment  is  specified  in  the  in- 
strument and  it  is  there  presented; 

2.  Where  no  place  of  payment  is  specified,  but  the 
address  of  the  person  to  make  payment  is  given  in  the 
instrument  and  it  is  there  presented; 

3.  Where  no  place  of  payment  is  specified  and  no 
address  is  given  and  the  instrument  is  presented  at 
the  usual  place  of  business  or  residence  of  the  person 
to  make  payment; 

4.  In  any  other  case  if  presented  to  the  person  to 
make  payment  wherever  he  can  be  found,  or  if  pre- 
sented at  his  last  known  place  of  business  or  residence. 

Address  of  indorser. — For  a  case  applying  this  section,  see 
Lankofsky  v.  Raymond,  217  Mass.  98. 

Paper  payable  at  branch  bank. — The  words  in  this  section  "a 
place  of  payment"  do  not  mean  an  individual,  a  corporation  or 
an  institution,  but  the  place  itself;  and  hence,  where  paper  is 
made  payable  at  one  of  several  branches  maintained  by  a  bank  or 
trust  company  in  the  same  city  or  county,  it  must  be  presented 
at  that  branch,  and  presentment  at  the  main  office  will  not  be 
sufficient  to  charge  an  indorser.  Iron  Clad  Mfg.  Co.  v.  Sackin, 
129  App.  Div.  (N.  Y.)  555. 

Where  no  place  of  payment  is  indicated. — See  Gates  v.  Beecher, 
60  N.  Y.  518,  522;  Holtz  v.  Boppe,  37  N.  Y.  634.  A  presentment 
at  the  maker's  usual  place  of  business  during  business  hours, 
there  being  no  one  there  to  answer,  is  a  sufficient  demand  to 
charge  the  indorser;  for  the  maker  is  bound  to  have  a  suitable 
person  there  to  answer  inquiries,  and  pay  his  notes,  if  there  de- 
manded. Baumgardner  v.  Reeves,  35  Pa.  St.  250;  Wallace  v. 
Crilly,  46  Wis.  577.  And  presentment  at  such  place  is  sufficient, 
though  it  be  closed,  there  being  no  explanation  furnished  as  to 
why  it  is  closed.  Sulsbacker  v.  Bank  of  Charleston,  86  Tenn.  201. 
If,  however,  the  party  has  abandoned  his  place  of  business  at 
the'  maturity  of  the  paper,  but  has  a  residence  or  other  place  of 
business  in  the  city,  which  could  be  ascertained  by  reasonable  in- 


14S  THE   NEGOTIABLE   INSTRUMENTS   LAW. 

quiry,  a  presentment  at  the  former  place  of  business  would  not 
be  sufficient.  (Id.)  The  making  and  dating  of  a  promissory  note 
at  a  particular  place  is  not  equivalent  to  making  it  payable  there, 
nor  does  it  supersede  the  necessity  for  presentment  and  demand 
at  the  residence  or  place  of  business  of  the  maker  if  it  be  known, 
or  if  by  due  diligence  in  making  inquiry  it  could  be  ascertained. 
Oxnard  v.  Varnum,  111  Pa.  St.  193.  But  where  a  bill  of  exchange 
is  addressed  to  the  drawee  at  a  particular  house,  and  the  same 
is  accepted  generally  by  him,  the  address  indicates  the  place  where 
it  is  to  be  presented  for  payment,  and  a  presentment  there  is  suf- 
ficient as  against  the  drawee  and  indorsers.  Pierce  v.  Struthers, 
27  Pa.  St.  249,  254;  Struthers  v.  Blake  et  al.,  30  Pa.  St.  139. 
Where  a  note  is  dated  at  a  particular  place,  and  no  other  place 
is  designated  as  that  of  its  negotiation  and  payment,  the  presump- 
tion is  that  the  maker  resides  where  the  note  is  dated,  and 
that  he  contemplates  payment  at  that  place.  Sasscer  v.  Stone, 
10  Md.  98;  Ricketts  v.  Pendleton,  14  Md.  320;  Nailor  v.  Bowie, 
3  Md.  251;  Clark  v.  Seabright,  135  Pa.  St.  173.  But  this  is  pre- 
sumption only,  and  if  he  resides  elsewhere  within  the  state  when 
the  note  falls  due,  and  this  is  known  to  the  holder,  demand  must 
oe  made  at  the  maker's  residence  or  place  of  business.  Sasscer 
v.  Stone,  10  Md.  98.  When  the  maker  does  not  reside,  and  has 
no  place  of  business,  in  the  state  where  the  note  is  payable,  no 
demand  upon  him  is  necessary  in  order  to  charge  the  indorser. 
Ricketts  v.  Pendleton,  14  Md.  320.  And  if  the  maker  absconds, 
this  will  generally  excuse  the  demand;  but  if  he  changes  his  resi- 
dence within  the  same  jurisdiction,  the  holder  must  endeavor  to 
find  it  and  make  demand  there.  Nailor  v.  Bowie,  3  Md.  251.  But 
where  the  maker  or  acceptor  waives  presentment  at  his  place  of 
business  or  residence,  presentment  elsewhere  may  be  sufficient. 
King  v.  Holmes,  11  Pa.  St.  456 ;  Parker  v.  Kellogg,  158  Mass.  90. 
For  a  case  applying  the  statute,  see  Bardsley  v.  Washington  Mill 
Co.,  54  Wash.  553. 

Where  person  to  make  payment  has  removed. — If  the  maker 
leaves  the  state  subsequent  to  the  making  of  the  note,  present- 
ment at  his  former  place  of  business  or  residence  is  sufficient. 
Nailor  v.  Bowie,  3  Md.  251. 

§  74.    Instrument  must  be  exhibited. — The  instru- 
ment must  be  exhibited  to  the  person  from  whom  pay- 


PRESENTMENT   FOR   PAYMENT.  149 

ment  is  demanded,  and  when  it  is  paid  must  be  de- 
livered up  to  the  party  paying  it. 

Rule  at  common  law. — This  section  makes  no  change  in  the  law. 
See  Ocean  Nat.  Bank  v.  Fant,  50  N.  Y.  474,  476 ;  Smith  v.  Eock- 
well,  2  Hill,  482 ;  Musson  v.  Lake,  4  How.  262 ;  Freeman  v.  Boyn- 
ton,  7  Mass.  483;  Draper  v.  Clemens,  7  Mo.  52.    % 

Reason  for  the  rule. — This  is  requisite  in  order  that  the  drawer 
or  acceptor  may  be  able  to  judge  (1)  of  the  genuineness  of  the  in- 
strument; (2)  of  the  right  of  the  holder  to  receive  payment;  and 
(3)  that  he  may  immediately  reclaim  possession  upon  paying  the 
amount.    Waring  v.  Betts,  90  Va.  46,  51. 

Where  payment  refused. — Demand  of  payment  without  actual 
exhibition  of  the  note  is  sufficient  to  bind  the  indorser  where  the 
maker  does  not  demand  to  see  the  note,  but  refuses  payment  on 
other  grounds.  Legg  v.  Viman,  165  Mass.  555;  Waring  v.  Betts, 
90  Va.  46;  Lockwood  v.  Crawford,  18  Conn.  361;  Fall  River  Union 
Bank  v.  Willard,  5  Metcalf,  216. 

Tender  of  collateral  security. — Where  the  note  is  secured  by 
collaterals  the  maker  is  entitled  to  require  that  they  be  delivered 
with  the  note ;  and  if  he  insists  upon  it,  they  must  be  tendered  with 
the  note  or  the  demand  of  payment  will  not  be  sufficient.  Ocean 
Nat.  Bank  v.  Fant,  50  N.  Y.  474. 

Certificate  of  deposit. — The  usual  words  in  a  certificate  of  de- 
posit by  which  it  is  made  payable  ' '  upon  the  return  of  this  certifi- 
cate properly  indorsed,"  add  nothing  to  its  provisions,  since  there 
is  always  an  implied  obligation  that  the  paper  will  be  returned 
upon  payment.  Thompson  v.  Farmers'  Bank,  140  N.  W.  Rep. 
(Iowa)  877. 

Demand  over  telephone. — As  presentment  must  be  made  by  ac- 
tual exhibition  of  the  paper,  or  at  least,  by  some  clear  indication 
that  the  paper  is  at  hand  ready  to  be  delivered,  a  demand  over  the 
telephone  at  the  place  specified  in  the  instrument  is  not  sufficient. 
Gilpin  v.  Savage,  201  N.  Y.  167. 

Request  for  payment. — An  informal  request  for  the  payment 
of  a  demand  note,  not  intended  as  a  formal  presentment,  is  insuffici- 
ent. State  of  N.  Y.  Nat.  Bank  v.  Kennedy,  145  App.  Div.  (N.  Y.) 
669. 


150  THE   NEGOTIABLE  INSTRUMENTS  LAW. 

§  75.  Presentment  where  instrument  payable  at 
bank. — Where  the  instrument  is  payable  at  a  bank, 
presentment  for  payment  must  be  made  during  banking 
hours,  unless  the  person  to  make  payment  has  no  funds 
there  to  meet  it  at  any  time  during  the  day,  in  which 
case  presentment  at  any  hour  before  the  bank  is  closed 
on  that  day  is  sufficient. 

Variant  readings. — In  Nebraska  all  after  the  words  "  banking 
hours  "  is  omitted. 

Rule  at  common  law. — This  section  makes  no  change  in  the  law. 
See  Salt  Springs  National  Bank  v.  Burton,  58  N.  Y.  430;  Bank 
of  Syracuse  v.  Hollister,  17  N.  Y.  46 ;  Bank  of  Utica  v.  Smith,  18 
Johns.  230;  Parker  v.  Gordon,  7  East.  387;  Garnett  v.  Woodcock,  1 
Starkie,  475 ;  Beed  v.  Wilson,  41  N.  J.  Law,  29 ;  Waring  v.  Betts, 
90  Va.  46 ;  Shepard  v.  Chamberlain,  8  Gray,  225. 

What  are  banking  hours. — What  will  constitute  banking  hours 
within  the  meaning  of  the  statute  has  reference  to  the  general  cus- 
tom of  the  place  where  the  transaction  occurs.  Columbian  Bank- 
ing Co.  v.  Bowen,  134  Wis.  218.  Thus,  where  presentment  was 
made  to  a  Chicago  bank  between  three  and  six  o  'clock  in  the  after- 
noon, and  it  appeared  that  the  business  day  of  the  bank  continued 
after  the  close  of  clearing-house  transactions,  so  as  to  enable  banks 
holding  paper  for  collection  to  present  those  items  which  had  been 
refused  payment  through  the  clearings,  it  was  held  that  the  pre- 
sentment satisfied  the  requirements  of  the  statute.  To  the  same 
effect,  see  also  Citizens'  Central  Bank  v.  New  Amsterdam  Nat. 
Bank,  128  App.  Div.  (N.  Y.)  554;  Columbia-Knickerbocker  Trust 
Co.  v.  Miller,  156  Id.  810 ;  s.  c.  215  N.  Y.  191. 

Where  paper  is  lodged  with  bank. — When  a  note  is  made  pay- 
able at  a  bank,  it  is  a  sufficient  presentment,  if  the  note  is  actually 
in  the  bank  at  maturity  ready  to  be  delivered  upon  payment.  De 
La  Vergne  v.  Globe  Printing  Co.,  148  Pac.  Rep.  (Colo.)  922;  Dky- 
man  v.  Northridge,  1  App.  Div.  (N.  Y.)  26;  Hollowell  v.  Curry,  41 
Pa.  St.  322. 

Bank  custom. — As  to  bank  customs,  see  Grand  Bank  v.  Blanch- 
ard,  23  Pick.  305,  306;  Mechanics'  Bank  v.  Merchants'  Bank,  6 
Mete.  13,  24;  Boston  Bank  v.  Hodges,  9  Pick.  420;  People's  Bank 


PRESENTMENT   FOR   PAYMENT.  151 

v.  Keech,  26  Md.  521.  But  now  that  the  statute  prescribes  the 
rules  as  to  presentment,  these  matters  can  no  longer  be  governed 
by  custom;  certainly  not,  if  the  custom  conflicts  with  the  statute. 

Where  bank  has  been  closed. — Under  the  statute,  paper  payable 
at  a  bank  may  be  presented  there  though  the  bank  is  closed  and 
In  the  hands  of  a  receiver,  and  a  demand  upon  the  receiver  person- 
ally is  not  necessary.  Schlesinger  v.  Schultz,  110  App.  Div.  (N. 
Y.)  356.  See  also  Berg  v.  Abbott,  83  Pa.  St.  177.  But  compare 
Hutchison  v.  Crutcher,  98  Tenn.  421,  where  it  was  held  that,  when 
a  national  bank  has  been  placed  in  the  hands  of  a  receiver,  paper 
payable  at  the  bank  should  be  presented  at  the  office  of  the  receiver. 
See  section  73,  subdivision  1. 

How  presentment  made. — Where  a  note  is  made  payable  at 
bank  it  is  sufficient  that  it  be  presented  there  during  banking  hours, 
and  it  need  not  remain  at  the  bank  during  all  of  the  day  of  ma- 
turity. Archuleta  v.  Johnston,  53  Colo.  393.  But  compare  Ger- 
man-Am. Bank  v.  Millman,  31  Misc.  (N.  Y.)  87. 

Where  name  of  bank  not  clearly  specified. — Where  a  note  dated 
at  a  particular  place  is  payable  at  "  The  First  National  Bank,"  the 
place  of  payment  is  the  First  National  Bank  of  that  place,  and 
presentment  should  be  made  there.  Finch  v.  Calkins,  183  Mich. 
298.  But  it  has  been  held  that  the  office  of  a  private  banker  is 
not  a  bank  within  the  terms  of  a  note  made  payable  at  "any 
bank  in  Boston."    Way  v.  Butterworth,  108  Mass.    509. 

When  suit  may  be  commenced. — The  authorities  are  not  agreed 
upon  the  point  as  to  the  precise  time  when  suit  may  be  brought  on 
a  dishonored  note  payable  at  a  bank,  some  holding  that  it  cannot 
be  brought  until  the  day  after  its  dishonor,  others  that  it  may  be 
brought  at  any  time  after  the  expiration  of  business  hours  on  the 
day  it  is  payable,  and  others  still  that  it  may  be  commenced  as  soon 
as  payment  is  refused  on  that  day.  Citizens'  Bank  v.  Lay,  80  Va. 
436,  440;  Church  v.  Clark,  21  Pick.  309;  Blackman  v.  Nearing,  43 
Conn.  60;  Humphreys  v.  Sutcliffe,  192  Pa.  St.  336;  Hardon  v. 
Dixon,  77  App.  Div.  (N.  Y.)  241. 

Kentucky  statute. — The  Negotiable  Instruments  Law  repealed 
the  former  Kentucky  statute  which  provided  that  a  note  to  be  nego- 
tiable should  be  payable  and  negotiable  at  a  bank  in  the  state. 
Gahren  v.  Parkersburg  Nat.  Bank,  157  Ky.  266. 


152  THE   NEGOTIABLE   INSTRUMENTS  LAW. 

§  76.  Where  person  primarily  liable  is  dead. — 
Where  the  person  primarily  liable  on  the  instrument 
is  dead,  and  no  place  of  payment  is  specified,  present- 
ment for  payment  must  be  made  to  his  personal  repre- 
sentative if  such  there  be,  and  if,  with  the  exercise  of 
reasonable  diligence,  he  can  be  found. 

Proof  of  death. — But  there  must  be  competent  and  legal  proof 
of  his  death,  and  that  the  party  upon  whom  the  demand  was  made 
was  such  representative;  the  statement  of  these  facts  in  the  pro- 
test is  not  prima  facie  proof  thereof.  Weems  v.  Farmers'  Bank, 
15  Md.  231. 

Evidence  as  to  reasonable  diligence. — As  to  what  evidence  will 
justify  a  finding  that  the  holder  could  not,  with  reasonable  diligence, 
make  presentment  to  the  administrator  of  the  deceased  maker.  See 
Reed  v.  Spear,  107  App.  Div.  (N.  Y.)  144. 

Necessity  for  giving  notice. — The  fact  that  the  holder  is  ex- 
cused from  making  presentment  under  this  section  does  not  relieve 
him  from  the  duty  of  giving  notice  of  dishonor  to  the  indorser. 
Eeed  v.  Spear,  107  App.  Div.   (N.  Y.)   144. 

§  77.   Presentment  to  persons  liable  as  partners. — 

"Where  the  persons  primarily  liable  on  the  instrument 
are  liable  as  partners,  and  no  place  of  payment  is  speci- 
fied, presentment  for  payment  may  be  made  to  any  one 
of  them,  even  though  there  has  been  a  dissolution  of 
the  firm. 

Rule  at  common  law. — This  section  makes  no  change  in  the  law. 
See  Gates  v.  Beecher,  60  N.  Y.  518;  Cayuga  County  Bank  v.  Hunt, 
2  Hill,  635;  Crowley  v.  Barry,  4  Gill,  194;  Fourth  Nat.  Bank  v. 
Henschuk,  52  Mo.  207. 

§  78.  Presentment  to  joint  debtors. — Where  there 
are  several  persons,  not  partners,  primarily  liable  on 
the  instrument,  and  no  place  of  payment  is  specified, 
presentment  must  be  made  to  them  all. 


PRESENTMENT   FOR   PAYMENT.  153 

Variant  readings. — In  North  Carolina  the  word  "  parties  "  is 
substituted  for  "partners."  This  is  evidently  an  error  in  en- 
grossing. 

Eule  at  common  law. — This  section  does  not  change  the  law. 
See  Gates  v.  Beecher,  60  N.  Y.  518,  523 ;  Union  Bank  v.  Willis,  8 
Mete.  504;  Arnold  v.  Dresser,  8  Allen,  435;  Willis  v.  Green,  5 
Hill,  232 ;  Benedict  v.  Schmieg,  13  Wash.  476. 

Where  presentment  to  all  is  impracticable. — In  some  cases  pre- 
sentment to  all  the  parties  primarily  liable  will  be  impracticable, 
but  such  cases  are  covered  by  section  82. 

Suits  where  liability  is  joint  and  several. — The  holder  of  a  joint 
and  several  note  may  sue  one  maker  alone  upon  one  cause  of  action 
arising  out  of  the  note,  and  all  makers  generally  upon  another  such 
cause  of  action.    Davis  v.  Schmidt,  126  Wis.  461. 

§  79.  When  presentment  not  required  to  charge  the 
drawer. — Presentment  for  payment  is  not  required  in 
order  to  charge  the  drawer  where  he  has  no  right  to 
expect  or  require  that  the  drawee  or  acceptor  will  pay 
the  instrument. 

Expectation  that  paper  will  be  paid. — Presentment  is  not  dis- 
pensed with  merely  because  the  drawer  has  no  funds  in  the  hands 
of  the  drawee.  Life  Insurance  Company  v.  Pendleton,  112  U,  S. 
708;  Dickens  v.  Beal,  10  Pet.  572;  Welch  v.  B.  C.  Taylor  Mfg. 
Co.,  82  111.  581;  Kimball  v.  Bryan,  56  Iowa,  632;  Kingsley  v.  Kob- 
inson,  21  Pick.  327.  It  is  sufficient  if  the  drawer  had  a  reasonable 
expectation  that  the  bill  would  be  paid;  or  if  there  was  an  agree- 
ment between  him  and  the  drawee  that  the  latter  should  accept,  or 
a  course  of  dealing  between  them  by  which  the.  drawee  was  accus- 
tomed to  accept  without  reference  to  the  state  of  the  mutual  ac- 
count. See  cases  cited  above.  Presentment  of  a  check  is  excused 
where  the  making  of  the  check  was  a  fraud  upon  the  part  of  the 
drawer,  he  having  no  funds  in  the  bank,  and  no  ground  for  a  rea- 
sonable expectation  that  it  would  be  paid.  Beaureguard  v.  Knowl- 
ton,  156  Mass.  395,  396. 

§  80.  When  presentment  not  required  to  charge  the 
indorser. — Presentment  for  payment  is  not  required  in 


154  THE   NEGOTIABLE  INSTRUMENTS  LAW. 

order  to  charge  an  indorser  where  the  instrument  was 
made  or  accepted  for  his  accommodation,  and  he  has 
no  reason  to  expect  that  the  instrument  will  be  paid  if 
presented. 

Variant  readings. — In  Illinois  the  words  "  and  he  has  no  reason 
to   expect  that  the  instrument  will  be  paid  if  presented  "   are 

omitted. 

Where  indorser  promises  to  pay. — Thus,  where  the  note  is  made 
for  the  accommodation  of  the  indorser,  and  he  promises  the  maker 
to  "  take  care  of  it,"  presentment  and  notice  of  dishonor  are  not 
necessary.  Dillon  v.  Bron,  150  Pac.  Rep.  (Kans.)  553.  See  also 
Belch  v.  Roberts,  177  S.  W.  Rep.  (Mo.  App.)  1062;  Luckenbach  v. 
McDonald,  184  Fed.  Rep.  184. 

§  81.  When  delay  in  making  presentment  is  excused. 
— Delay  in  making  presentment  for  payment  is  excused 
when  the  delay  is  caused  by  circumstances  beyond  the 
control  of  the  holder,  and  not  imputable  to  his  default, 
misconduct  or  negligence.  When  the  cause  of  delay 
ceases  to  operate,  presentment  must  be  made  with  rea- 
sonable diligence. 

Rule  at  common  law. — This  section  makes  no  change  in  the  law. 
See  Windham  Bank  v.  Norton,  22  Conn.  213;  Pier  v.  Heinrich- 
soften,  67  Mo.  163.  In  these  cases  the  delay  was  caused  by  mis- 
carriage in  the  mail.     See  section  105. 

Sickness  as  an  excuse.— Sickness  of  the  holder  of  the  note  is 
not  an  excuse  for  the  failure  to  present  it  at  the  proper  time,  un- 
less it  was  not  only  sudden,  but  so  severe  as  not  only  to  prevent 
him  from  making  the  presentment  and  giving  notice  of  non-pay- 
ment himself,  but  from  employing  another  person  to  do  it;  and 
then  it  must  be  shown  that  the  proper  steps  were  taken  as  soon  as 
the  disability  was  removed.    Wilson  v.  Senier,  14  Wis.  380. 

Question  of  law  or  fact. — Where  the  facts  are  not  disputed 

the  question  of  clue  diligence  is  one  of  law  for  the  court;  but  if 

there  is  a  dispute  as  to  the  facts,  the  question  is  for  the  jury. 
Belden  v.  Lamb,  17  Conn.  451. 


PRESENTMENT   FOR   PAYMENT.  155 

§  82.  When  presentment  may  be  dispensed  with. — 

Presentment  for  payment  is  dispensed  with : 

1.  Where  after  the  exercise  of  reasonable  diligence 
presentment  as  required  by  this  act  cannot  be  made; 

2.  Where  the  drawee  is  a  ficitious  person; 

3.  By  waiver  of  presentment  express  or  implied. 

Reasonable  diligence — Burden  of  proof. — The  burden  is  upon 
the  holder  to  show  that  due  diligence  was  used.  Eaton  v.  McMahon, 
42  Wis.  484. 

Duty  to  inform  notary. — It  is  the  duty  of  a  holder  to  give  the 
notary  information  as  to  the  residence  of  the  drawer  and  indorser; 
and  if  this  is  unknown  to  the  holder,  he  must  inquire  of  those 
whose  names  are  upon  the  note  or  bill  as  to  the  residence  which 
he  does  not  know.  If  there  are,  none  such,  he  must  use  due  dili- 
gence to  ascertain  them.  It  will  not  do  for  the  holder  to  put  the 
note  or  bill  in  the  hands  of  the  notary  at  the  place  where  it  was 
drawn  without  furnishing  him  any  information  as  to  the  residence 
of  the  maker,  or  that  of  the  indorser,  and  then  for  the  notary, 
without  inquiry  from  him,  to  return  the  note  without  demand  or 
notice.  The  holder  is,  of  all  persons,  the  one  most  likely  to  know 
the  place  of  residence  of  those  to  whom  he  looks  for  payment,  and 
due  diligence  requires  that  he  should  give  the  information  to  his 
agent,  whom  he  employs  to  make  demand  from  the  maker  and  give 
notice  to  the  indorser;  or,  if  he  neglects  to  do  so,  that  the  agent 
should  inquire  of  him  where  the  parties  reside.  Smith  v.  Fisher, 
24  Pa.  St.  222. 

Question  of  law  or  fact. — When  the  facts  are  undisputed,  the 
question  of  diligence  is  for  the  court.  Smith  v.  Fisher,  24  Pa.  St. 
222 ;  Wheeler  v.  Field,  6  Mete.  290. 

Insolvency  of  maker  or  acceptor. — Presentment  is  not  dispensed 
with  by  the  insolvency  of  the  maker  or  acceptor.  Reincke  v. 
Wright,  93  Wis.  368;  Hawley  v.  Jette,  10  Oregon,  31;  Bensonhurst 
v.  Wilby,  45  Ohio  St.  340 ;  Jackson  v.  Richards,  2  Caines,  343 ;  Arm- 
strong v.  Thurston,  11  Md.  148. 

Waiver. — The  waiver  may  be  made  either  during  the  currency 
of  the  note  or  after  its  maturity.  Power  v.  Mitchell,  7  Wis.  161. 
And  evidence  of  contemporaneous  facts  and  circumstances,  at  the 


156  THE   NEGOTIABLE  INSTRUMENTS  LAW. 

time  of  the  transaction,  may  be  shown  in  evidence,  in  order  to  as- 
certain whether  or  not  a  waiver  was  intended.    Baumeister  v.  Kuntz, 
53  Fla.  340.     The  waiver  may  be  made  eitber  verbally  or  in  writ- 
ing.   Smith  v.  Lownsdale,  6  Oregon,  78.    Nor  is  it  necessary  that 
the  waiver  should  be  direct  and  positive.    It  may  result  from  im- 
plication and  usage,  or  from  any  understanding  between  the  par- 
ties which  is  of  a  character  to  satisfy  the  mind  that  a  waiver  is  in- 
tended.   Cady  v.  Bradshaw,  116  N.  Y.  188,  191.    The  waiver  must 
be  clearly  established,  however,  and  will  not  be  inferred  from  doubt- 
ful or  equivocal  acts  or  language.     Boss  v.  Hurd,  71  N.  Y.  14; 
Worley  v.  Johnson,  60  Ma.  295.     But  any  language  is  sufficient, 
which  is  calculated  to  induce  the  holder  to  forbear  taking  the  neces- 
sary steps  to  charge  the  indorser.     Torbert  v.  Montague,  38  Colo. 
325 ;  Moyer  &  Brothers'  Appeal,  87  Pa.  129 ;  Boyd  v.  Bank  of  Toledo, 
32  Ohio  St.  526;  Worley  v.  Johnson,  60  Fla.  295.    Where  the  in- 
dorser requests  the  holder  to  extend  the  time  of  payment  and  prom- 
ises to  let  his  name  remain  on  the  instrument,  this  will  amount  to 
a  waiver  of  presentment  and  notice  of  non-payment.    Cady  v.  Brad- 
shaw, 116  N.  Y.  188,  191,  192.     So,  a  telegram  sent  to  the  collect- 
ing bank  requesting  it  to  pay  the  note  and  save  protest  and  draw, 
in  reply  to  an  inquiry  made  of  the  firm  by  such  bank,  is  a  suffici- 
ent waiver.     Seldner  v.  Mount  Jackson  National  Bank,  66  Md. 
488.     So,  where  an  indorser  admits  his  liability  at  the  time  of  the 
maturity  of  the  note  and  accompanies  such  admission  with  an  offer 
to  "arrange  the  matter"  with  the  holders,  and  thereafter  by  his 
conduct  shows  that  he  regards  himself  as  liable,  and  asks  for  indul- 
gence.    Moyer  &  Brothers'  Appeal,  87  Pa.  St.  129.     So,  where  a 
note  a  short  time  before  the  day  of  its  maturity,  is  presented  to  an 
indorser,  and  the  latter  then  promises  that  if  the  note  is  suffered 
to  run  he  will  pay  it  whenever  payment  is  called  for.    Hale  v.  Dan- 
forth,  46  Wis.  554.     So,  where,  in  response  to  inquiry  by  the  holder, 
the  indorser  told  him  that  it  would  be  of  no  use  to  call  upon  the 
maker.    Barker  v.  Parker,  6  Pick.  80.    And  so,  where  the  president 
of  a  corporation  who  was  an  indorser  upon  its  note  participated  in 
the    act   which    made   it    impossible    for    the    corporation    to    pay. 
O'Bannon  Co.  v.  Curran,  129  App.  Div.  (N.  Y.)  96.    As  to  waiver 
where  the  maker  has  transferred  all  his  property  to  the  indorsee,  see 
Brandt  v.   Mickle,  26  Md.  436;   Mechanics'  Bank  v.  Griswold,  7 
Wend.  165 ;  Moore  v.  Alexander,  63  App.  Div.  (N.  Y.)  100 ;  Brown 
v.  Maffey,  15  East.  222 ;  Bond  v.  Farnham,  5  Mass.  170.    For  cases 
construing  waivers  see  Parr  v.  City  Trust  Company,  95  Md.  291, 


PRESENTMENT   FOR   PAYMENT.  157 

300-301;  Toole  v.  Crafts,  193  Mass.  110;  Baumeister  v.  Kuntz,  53 
Fla.  340. 


Statute  of  Frauds. — An  agreement  to  waive  demand  and  notice 
is  not  within  the  statute  of  frauds;  it  is  not  a  new  contract,  but 
only  a  waiver,  absolutely  or  in  part,  of  a  condition  precedent  to  lia- 
bility. Taunton  Bank  v.  Richardson,  5  Pick.  436;  Barclay  v. 
Weaver,  19  Pa.  St.  396 ;  Power  v.  Mitchell,  7  Wis.  159,  166. 

Consideration. — From  the  nature  of  the  indorser's  contract  no 
new  consideration  is  required  to  support  the  waiver  given  before 
or  after  the  maturity  of  the  paper.  Burgettstown  Nat.  Bank  v. 
Nill,  213  Pa.  St.  456. 

Pleading. — The  facts  constituting  the  waiver  must  be  specifically 
pleaded.  Galbraith  v.  Shepard,  43  Wash.  698.  And  proof  of 
waiver  may  not  be  given  under  an  allegation  of  due  presentment. 
Baer  v.  Hoffman,  150  App.  Div.  (N.  Y.)  473. 

Necessity  for  waiver  of  presentment. — As  the  indorser  is  liable 
only  upon  two  distinct  conditions,  viz.:  (1)  That  due  presentment 
be  made  and  (2)  that  due  notice  of  dishonor  be  given,  a  waiver 
of  the  one  is  not  a  waiver  of  the  other.  Hall  v.  Crane,  213  Mass. 
326 ;  Berkshire  Bank  v.  Jones,  6  Mass.  524 ;  Low  v.  Howard,  11 
Cush.  268,  270 ;  Baer  v.  Hoffman,  150  App.  Div.  (N.  Y.)  473.  But 
see  section  111. 

§  83.  When  instrument  dishonored  by  non-payment. 
— The  instrument  is  dishonored  by  non-payment  when : 

1.  It  is  duly  presented  for  payment  and  payment  is 
refused  or  cannot  be  obtained;  or 

2.  Presentment  is  excused  and  the  instrument  is 
overdue  and  unpaid. 

§  84.  Right  of  recourse  to  parties  secondarily  liable. 

- — Subject  to  the  provisions  of  this  act,  when  the  in- 
strument is  dishonored  by  non-payment,  an  immediate 
right  of  recourse  to  all  parties  secondarily  liable 
thereon,  accrues  to  the  holder. 

Nature  of  liability. — When  the  indorser's  liability  has  been 
fixed  by  demand  and  notice  of  dishonor,  he  becomes  an  independ- 


t/   158  THE   NEGOTIABLE  INSTRUMENTS  LAW. 


. 


ent  and  principal  debtor,  and  does  not  stand  in  the  position  of  a 
mere  surety.  Curtis  v.  Davidson,  215  N.  Y.  395;  German- Ameri- 
can Bank  v.  Niagara  Cycle  Co.,  13  App.  Div.  (N.  Y.)  450;  First 
Nat.  Bank  v.  Wood,  71  N.  Y.  405,  411. 

Where  paper  secured  by  collaterals. — Though  the  holder  has  re- 
ceived collateral  from  the  maker,  the  law  implies  no  contract  to 
proceed  on  the  collaterals  before  suing  the  indorser.  Buck  v. 
Freehold  Bank,  37  N.  J.  Law,  307. 

Conditional  guaranties. — The  section  does  not  change  the  la-w- 
as to  conditional  guaranties,  as,  for  example,  a  guaranty  of  the 
collectibility  of  the  instrument,  in  which  ease  there  is  no  right  of 
recourse  against  the  guarantor  until  the  holder  has  first  made 
proper  effort  to  collect  from  the  principal  debtor,  for  in  such  case 
the  terms  of  the  express  contract  exclude  the  idea  of  an  intention 
to  incur  the  liability  prescribed  by  the  statute.  Cowles  v.  Peck,  55 
Conn.  251;  Summers  v.  Barrett,  65  Iowa,  292. 

§  85.  Time  of  maturity. — Every  negotiable  instru- 
ment is  payable  at  the  time  fixed  therein  without  grace. 
"When  the  day  of  maturity  falls  upon  Sunday,  or  a  holi- 
day, the  instrument  is  payable  on  the  next  succeeding 
business  day.  Instruments  falling  due  or  becoming 
payable  on  Saturday  are  to  be  presented  for  payment 
on  the  next  succeeding  business  day,  except  that  in- 
struments payable  on  demand  may,  at  the  option  of 
the  holder,  be  presented  for  payment  before  twelve 
o'clock  noon  on  Saturday  when  that  entire  day  is  not 
a  holiday. 

Variant  readings. — In  Rhode  Island  the  words  "  except  sight 
drafts  "  are  interpolated  after  the  words  "  every  negotiable  in- 
strument." In  New  Hampshire,  at  the  end  of  the  first  sentence, 
the  following  is  added:  "  except  that  three  days  of  grace  shall  be 
allowed  upon  a  draft  or  bill  of  exchange  made  payable  within 
this  commonwealth  at  sight,  unless  there  is  an  express  stipula- 
tion to  the  contrary."  In  Colorado  the  last  sentence  reads:  "  In- 
struments falling  due  on  any  day,  in  any  place  where  any  part  of 
such  day  is  a  holiday,  are  to  be  presented  for  payment  on  the  next 


PRESENTMENT   FOR   PAYMENT.  159 

succeeding  business  day,  except  that  instruments  payable  on  de- 
mand may,  at  the  option  of  the  holder,  be  presented  for  payment 
during  reasonable  hours  on  the  part  of  such  day  which  is  not  a 
holiday."     In  Arizona,  Kentucky  and  Wisconsin,  the  third  sent- 
ence is  omitted,  and  in  Vermont  all  of  the  third  sentence  down  to 
the  words  "  instrument  payable  on  demand."     In  Iowa  a  section 
has  been  added  to  the  statute  as  follows:     "A  demand  made  on 
any  one  of  the  three  days  following  the  day  of  maturity  of  the 
instrument,  except  on  Sunday  or  a  holiday,  shall  be  as  effectual  as 
though  made  on  the  day  on  which  demand  may  be  made  under  the 
provisions  of  this  act,  and  the  provisions  of  this  act  as  to  notice 
of  non-payment,  non-acceptance,  and  as  to  protest  shall  be  ap- 
plicable with  reference  to  such  demand  as  though  the  demand 
were  made  in  accordance  with  the  terms  of  this  act;  but  the  pro- 
visions of  this  section  shall  not  be  construed  as  authorizing  de- 
mand on  any  day  after  the  third  day  from  that  on  which  the  in- 
strument falls  due  according  to  its  face."     In  Massachusetts  the 
section  has  been  amended  to  read  as  follows :    ' '  Every  negotiable 
instrument  is  payable  at  the  time  fixed  therein  without  grace,  ex- 
cept that  three  days  of  grace  shall  be  allowed  upon  a  draft  or  bill 
of  exchange  made  payable  within  this  commonwealth  at  sight,  un- 
less there  is  an  express  stipulation  to  the  contrary.     Where  the 
day  of  maturity  falls  upon  a  Saturday,  Sunday  or  a  holiday,  the 
instrument  is  payable  on  the  next  succeeding  business  day  which 
is  not  a  Saturday.    Instruments  payable  on  demand  may,  at  the 
option  of  the   holder,  be  presented  for  payment   before   twelve 
o'clock  noon  on  Saturday,  when  that  entire  day  is  not  a  holiday; 
provided,  however,  that  no  person  receiving  any  check,  draft,  bill 
of   exchange   or  promissory   note   payable   on   demand,   shall   be 
deemed  guilty  of  any  neglect  or  omission  of  duty,  or  incur  any 
liability,  for  not  presenting  for  payment  or  acceptance  or  collec- 
tion such  check,  draft,  bill  of  exchange  or  promissory  note  on  a 
Saturday;  provided  also,  that  the  same  shall  be  duly  presented 
for  payment  or  acceptance  or  collection  on  the  next  succeeding 
business  day."     (Acts,  1910,  eh.  417.)     In  North  Carolina  the  fol- 
lowing section  is  inserted:    "All  bills  of  exchange  payable  within 
the  state,  at  sight,  in  which  there  is  an  express  stipulation  to  that 
effect,  and  not  otherwise,  shall  be  entitled  to  days  of  grace  as  the 
same  are  allowed  by  the  customs  of  merchants  in  foreign  bills  of 
exchange  payable  at  the  expiration  of  a  certain  period  after  date 
on  sight;  provided,  that  no  days  of  grace  shall  be  allowed  on  any 


100  THE   .NEGOTIABLE  INSTRUMENTS  LAW. 

bill  of  exchange,  promissory  note  or  draft  payable  on  demand." 
In  Arkansas,  Florida,  Indiana,  Kansas,  Maryland,  Michigan,  Min- 
nesota, Missouri,  Montana,  Nebraska,  Nevada,  New  Jersey,  New 
York,  North  Carolina,  Ohio,  Oklahoma,  Oregon,  Pennsylvania, 
Tennessee,  Utah,  Virginia  and  Washington  the  words  "  or  becom- 
ing payable  "  have  been  interpolated  after  the  words  "  Instru- 
ments falling  due  "  in  the  third  sentence.  In  the  draft  of  the 
statute  published  by  the  Commissioners  on  Uniform  State  Laws, 
the  following  note  is  appended  to  this  section:  "  The  words  in 
brackets  [or  becoming  payable]  have  been  inserted  for  the  sake 
of  clearness.  They  are  found  in  the  New  York,  Missouri  and 
Virginia  Acts.  This  section  having  twice  used  the  word  '  payable  ' 
then  uses  the  words  '  falling  due.'  This  has  raised  doubts  in  the 
minds  of  some  where  Friday  is  a  legal  holiday  and  paper  matures 
on  Friday.  These  words  are  inserted  to  remove  any  possible 
doubt.  In  Crawford  on  Negotiable  Instruments  (3d  Ed.  1908), 
110-1,  it  is  argued  that  there  is  no  doubt,  and  that  it  is  unneces- 
sary to  insert  these  words.  Properly  interpreted,  there  is  no  neces- 
sity for  inserting  these  words,  but  as  legislation  is  cheaper  than 
litigation,  it  is  thought  wise  for  those  states,  which  have  not  yet 
enacted  this  Act  to  insert  these  words."  In  Massachusetts  and 
New  Hampshire  the  words  interpolated  are,  "  or  payable." 

'  §  86.  How  time  computed. — Where  the  instrument 
is  payable  at  a  fixed  period  after  date,  after  sight,  or 
after  the  happening  of  a  specified  event,  the  time  of 
payment  is  determined  by  excluding  the  day  from 
which  the  time  is  to  begin  to  run,  and  by  including 
the  date  of  payment. 

Origin  of  the  section. — This  section  was  adapted  from  sections 
26  and  27  of  the  New  York  Statutory  Construction  Law. 

Computation  of  time. — A  note  dated  November  8th  and  payable 
12  months  after  date,  matures  on  November  8th  of  the  following 
year,  and  a  presentment  on  November  9th  is  not  timely.  Lewy 
v.  Winkelson,  135  La.  105. 

§  87.  Instrument  payable  at  bank  —  effect  of. — 
Where  the  instrument  is  made  payable  at  a  bank  it  is 


PRESENTMENT   FOR   PAYMENT.  161 

equivalent  to  an  order  to  the  bank  to  pay  the  same 
for  the  account  of  the  principal  debtor  thereon. 

Variant  readings.— In  Illinois,  Nebraska  and  South  Dakota, 
this  section  is  omitted.  In  Missouri,  by  an  amendment  made  in 
1909,  the  following  was  added  at  the  end  of  the  section:  "  But 
where  the  instrument  is  made  payable  at  a  fixed  or  determinable 
future  time,  the  order  to  the  bank  is  limited  to  the  day  of  ma- 
turity only."  In  Minnesota  the  word  "  not  "  is  interpolated,  so 
that  the  section  reads  "  shall  not  be  equivalent,"  etc. 

Rule  at  common  law. — Prior  to  the  statute  there  was  some  con- 
flict in  the  decisions  as  to  the  authority  of  a  bank  to  pay  a  note 
or  acceptance  made  payable  there.  The  rule  adopted  in  the  stat- 
ute was  sustained  by  the  weight  of  authority;  and  is  also  the  rule 
which  is  most  convenient  in  practice.  It  is  supported  by  the  fol- 
lowing decisions:  Aetna  Nat.  Bank  v.  Fourth  Nat.  Bank,  46  N. 
Y.  82;  Commercial  Bank  v.  Hughes,  17  Wend.  94;  Commercial 
Nat.  Bank  v.  Henninger,  105  Pa.  St.  496 ;  Bedford  Bank  v.  Acoarn, 
125  Ind.  582;  Home  Nat.  Bank  v.  Newton,  8  Bradwell,  563; 
contra:  Grissom  v.  Commercial  Bank,  87  Tenn.  350.  In  Penn- 
sylvania it  was  held  that  where  a  bank  is  the  holder  of  a  note 
payable  at  the  banking  house,  and  upon  its  maturity  the  maker 
has  a  cash  deposit  in  such  bank  exceeding  the  amount  of  the  note, 
which  deposit  is  not  specially  applicable  to  a  particular  purpose, 
the  bank  is  bound  to  charge  up  the  amount  of  the  note  against 
the  deposit.  In  such  cases  the  note  is  in  effect  a  draft  on  the 
bank  in  favor  of  the  holder,  and  in  discharge  of  the  indurser. 
German  National  Bank  v.  Foreman,  138  Pa.  St.  474,  479;  Com- 
mercial National  Bank  v.  Henninger,  105  Pa.  496.  But  it  was 
also  held  in  that  state  that  while  a  bank  which  has  discounted 
a  promissory  note  may  appropriate  to  the  payment  of  the  note 
funds  in  its  hands  belonging  to  any  party  to  the  note,  when  pay- 
ment is  not  made  at  the  time  and  place  named,  yet  it  is  not 
bound  to  do  so  as  to  any  party  except  the  makers.  Mechanics' 
and  Traders'  Bank  v.  Seitz,  150  Pa.  St.  632. 

Where  paper  is  not  lodged  with  bank. — Where  a  note  is  made 

payable  at  a  bank  the  maker  may  tender  payment  at  the  bank, 

and  thus  avoid  default  and  stop  the  running  of  interest;  but,  if 

the  paper  is  not  lodged  there,  the  fact  that  it  is  payable  there  does 

11 


162  ^HE   NEGOTIABLE  INSTRUMENTS  LAW. 

not  make  the  bank  the  agent  of  the  holder  to  receive  payment. 
Stansbury  v.  Emberg,  128  Tenn.  104;  Griswold  v.  Davis,  125  Tenn. 
229.  The  statute  has  not  changed  the  law  in  this  respect.  Cheney 
v.  Libby,  134  U.  S.  68;  Hills  v.  Place,  48  N.  Y.  520;  Adams  v. 
Hackensack,  44  N.  J.  L.  638. 

Difference  between  note  and  check. — This  section  was  intended 
to  settle  the  vexed  question  of  the  bank's  authority,  without  spe- 
cific directions,  to  pay  the  notes  and  acceptance  of  its  customers 
made  payable  at  the  bank,  and  it  was  not  meant  to  assimilate 
such  notes  and  acceptance  to  checks  in  such  way  as  to  impose 
upon  the  holder  the  duty  of  presenting  them  as  required  by  sec- 
tion 186;  but  as  regards  the  maker  or  acceptor  the  provision  of 
section  70  applies,  that  presentment  for  payment  is  not  neces- 
sary in  order  to  charge  the  person  primarily  liable  on  the  instru- 
ment.    Binghamton  Pharmacy  v.  First  Nat.  Bank,  131  Tenn.  711. 
Hence,  the  maker  cannot  defend  upon  the  ground  that  the  holder's 
neglect  to  present  the  paper  resulted  in  loss  to  the  maker.    Id.    But 
in  Baldwin's  Bank  v.  Smith,  215  N.  Y.  76,  Miller,  J.,  who  wrote 
the  prevailing  opinion,  said:  "It  is  incumbent  on  the  holder  of 
the  paper  to  secure  payment,  and  loss  resulting  from  his  neglect 
should  fall  upon  him,  not  on  the  drawer,  who  has  no  further  duty 
to  perform.     I  am  unable  to  perceive  why  the  same  reason  does 
not  hold  good  in  the  case  of  a  note  payable  at  a  bank  where  the 
maker  has  funds  to  meet  it  at  maturity,  especially  since  such  a 
note  is  by  statute  made  the  equivalent  of  a  check.    To  the  extent 
that  he  has  appropriated  his  credit,  he  is  not  called  upon  to  look 
after  it,  but  discharges  his  duty  by  keeping  his  account  good. 
None  of  the  cases  in  this  jurisdiction  holding  that  the  maker  of 
a  note  payable  at  a  bank  is  not  exonerated  by  the  holder's  failure 
to  present  it  for  payment  involved  the  question  of  a  loss  resulting 
from   such   failure.     I  find   nothing   in   any   of   them  except   the 
dictum  in  the  Indig  case  to  the  effect  that  the  loss  in  such  case 
falls  on  the  maker."    A  ruling  upon  this  point,  however,  was  not 
necessary  to  the  decision  of  the  case,  and  the  observations  quoted 
may  be  regarded  as  a  mere  dictum. 

§  88.    What  constitutes  payment  in  due  course. — 

Pavment  is  made  in  due  course  when  it  is  made  at  or 
after  the  maturity  of  the  instrument  to  the  holder 
thereof  in  good  faith  and  without  notice  that  his  title 
is  defective. 


PRESENTMENT   FOR   PAYMENT.  163 

Payment  before  maturity. — Payment  before  the  day  is  a  de- 
fense which  binds  only  the  party  receiving  payment  and  those 
who  stand  in  his  shoes.     Watson  v.  Wyman,  161  Mass.  96,  99. 

Authority  to  receive  payment — Possession  of  paper. — It  is  the 
duty  of  the  maker  or  acceptor  to  require  a  production  of  the 
paper  before  paying  the  same  and  possession  is  generally  the  only 
adequate  evidence  upon  which  he  has  any  right  to  rely.  Loizeaux 
v.  Fremder,  123  Wis.  193;  Hay  den  v.  Speakman,  150  Pae. 
Kep.  (N.  M.)  292;  Adair  v.  Lenox,  15  Oregon,  489.  The 
rule  is  that  if  a  bill  or  note  be  paid  at  maturity  in  full,  by  the  ac- 
ceptor or  maker,  or  other  party  liable  to  a  person  having  a  legal 
title  in  himself  by  indorsement,  and  having  the  custody  and  pos- 
session of  the  bill  ready  to  surrender,  and  the  party  paying  has 
no  notice  of  any  defect  of  title  or  authority  to  receive,  the  pay- 
ment will  be  good.  But  if  upon  such  payment  the  holder  has  not 
the  actual  possession  of  the  paper  ready  to  be  delivered,  and  does 
not  in  fact  surrender  it,  but  gives  a  receipt  or  other  evidence  of 
the  payment,  and  it  turns  out  that  the  party  thus  receiving  had 
not  a  good  right  and  lawful  authority  to  receive  and  collect  the 
money,  but  that  another  person  has  such  right,  the  payment  will 
not  discharge  the  party  paying,  but  will  be  a  payment  in  his  own 
wrong.  Wheeler  v.  Guild,  20  Pick,  545,  553 ;  Trustees  of  the  I.  I. 
Funds  v.  Lewis,  34  Fla.  424,  428.  Concerning  this  rule,  the  Su- 
preme Court  of  Wisconsin  said  in  a  recent  case :  "  It  is  so  simple, 
and,  once  understood,  furnishes  so  easy  and  sure  a  means  for  both 
debtor  and  owner  to  protect  themselves  against  unauthorized  acts 
of  others,  that  it  ought  not  to  be  weakened  or  confused.  The 
holder  can  always  be  safe  by  retaining  the  instrument  in  his  pos- 
session ;  the  debtor,  by  refusing  payment  without  actual  presenta- 
tion. It  is  justified  in  application  to  negotiable  paper  distinctively 
from  other  property  by  the  very  dominant  purpose  of  easy  and 
probable  transfer  at  any  moment,  so  that  what  may  be  true  as  to 
ownership  of  such  paper  on  one  day  is  likely  to  have  changed 
on  the  next.  Of  the  probability  of  such  change  the  negotiability 
of  the  instrument  is  a  continual  warning.' '  Loizeaux  v.  Fremder, 
123  Wis.  193,  198.  Such  rule  applies  generally  to  all  negotiable 
paper  independently  of  the  existence  of  any  mortgage  or  other 
security.  Marling  v.  Nommensen,  127  Wis.  363.  Payment  made 
to  the  original  holder,  after  indorsement  and  delivery  of  the  paper 
even  as  collateral  security,  is  no  defense  to  a  suit  on  the  note  by 


164  THE  NEGOTIABLE  INSTRUMENTS  LAW. 

the  indorsee,  although  the  payment  was  made  by  the  maker  with- 
out notice  or  knowledge  of  the  transfer.  Gosling  v.  Griffin,  85 
Tenn.  737.  But  while  a  person  not  in  the  actual  possession  of  ne- 
gotiable paper  is  presumed  from  that  fact  alone  to  have  no  au- 
thority to  receive  payment  thereon,  yet  such  presumption  may  be 
rebutted  and  overcome  by  evidence  showing  actual  authority. 
Swengle  v.  Wells,  7  Ore.  222.  The  original  payee  of  a  negotiable 
note  in  possession  thereof,  is  presumed  to  be  the  owner,  and  has 
ostensible  authority  to  receive  payment,  although  the  note  bears 
the  blank  indorsement  of  such  payee.  Home  Savings  Bank  v. 
Stewart,  78  Neb.  624. 


NOTICE   OF  DISHONOR.  165 


ARTICLE  VIII. 

Notice  of  Dishonor. 

Section  89.  To  whom  notice  of  dishonor  nxust  be  given. 

90.  By  whom  given. 

91.  Notice  given  by  agent. 

92.  Effect  of  notice  given  on  behalf  of  holder. 

93.  Effect  where  notice  is  given  by  party  en- 

titled thereto. 

94.  When  agent  may  give  notice. 

95.  When  notice  sufficient. 

96.  Form  of  notice. 

97.  To  whom  notice  may  be  given. 

98.  Notice  where  party  is  dead. 

99.  Notice  to  partners. 

100.  Notice  to  other  joint  parties. 

101.  Notice  to  bankrupt. 

102.  Time  within  which  notice  to  be  given. 

103.  Where  parties  reside  in  same  place. 

104.  Where  parties  reside  in  different  places. 

105.  Miscarriage  in  mails — notice  deemed  to 

have  been  given. 

106.  Deposit  in  post-office — what  constitutes. 

107.  Notice  to  antecedent  parties  —  time  of. 

108.  Where  notice  must  be  sent. 

109.  Waiver  of  notice. 

110.  Parties  affected  by  waiver. 

111.  Waiver  of  protest. 

112.  When  notice  dispensed  with. 

113.  When  delay  in  giving  notice  is  excused. 

114.  When  notice  need  not  be  given  to  drawer. 

115.  When  notice  need  not  be  given  to  indorser. 


166  THE  NEGOTIABLE  INSTRUMENTS  LAW. 

Section  116.  Where  notice  of  non-acceptance  has  been 
given. 

117.  Omission  to  give  notice  of  non-accept- 

ance— subsequent  holder. 

118.  Protest  authorized  in  all  cases  of  dis- 

honor— when  required. 

§  89.  To  whom  notice  of  dishonor  must  be  given. — 
Except  as  herein  otherwise  provided,  when  a  negotiable 
instrument  has  been  dishonored  by  non-acceptance  or 
non-payment,  notice  of  dishonor  must  be  given  to  the 
drawer  and  to  each  indorser,  and  any  drawer  or  indor- 
ser  to  whom  such  notice  is  not  given  is  discharged. 

Accommodation  indorser. — Under  the  statute  an  accommoda- 
tion indorser  is  entitled  to  notice  of  dishonor  the  same  as  any 
other  indorser.  Perry  v.  Taylor,  148  N.  C.  362;  Houser  v.  Fays- 
soux,  168  N.  C.  1. 

Accommodation  maker. — The  fact  that  the  note  was  made  for 
accommodation  does  not  entitle  the  maker  to  notice  of  dishonor. 
First  Nat.  Bank  v.  Williams,  164  Ky.  143. 

Where  persons  signing  on  hack  of  paper  are  joint  makers. — If 
persons  whose  signatures  appear  on  the  back  of  the  paper  became 
parties  under  an  agreement  that  they  are  to  be  equally  liable  as 
joint  makers,  they  are  not  entitled  to  notice  of  dishonor.  Mercan- 
tile Bank  v.  Busby,  120  Tenn.  652.    But  see  note  to  section  68. 

Officers  and  directors  indorsing  for  accommodation. — That  ac- 
commodation indorsers  of  a  note  made  by  a  corporation  are  direc- 
tors of  the  corporation  and  constitute  a  majority  of  the  board  does 
not  dispense  with  the  necessity  for  giving  them  notice  of  dishonor. 
Houser  v.  Fayssoux,  168  N.  C.  1. 

Where  officer  of  discounting  hank  is  indorser. — Where  an  officer 
of  a  bank  is  an  indorser  upon  paper  held  by  the  bank  he  is  entitled 
to  notice  of  dishonor,  and  the  failure  to  give  him  notice  will  be  a 
good  defense  to  him  when  sued  upon  the  paper,  unless  it  was  his 
duty  as  such  officer  to  give  notice  of  dishonor  on  behalf  of  the 
bank.  First  Nat.  Bank  of  Louisville  v.  Bickel,  154  Ky.  11 J  Frazee 
v.  Phoenix  Nat.  Bank,  161  Ky.  175. 


NOTICE   OF  DISHONOR.  1G7 

Duty  of  collecting  bank. — A  bank  holding  for  collection  a  note 
"which  has  been  dishonored  is  required  to  give  notice  to  only  its 
•own  principal,  and  he  in  turn  to  give  notice  to  his  principal,  and 
so  on  down  the  line  of  indorsers.  Gleason  v.  Thayer,  87  Conn. 
790;  Shea  v.  Vahey,  215  Mass.  80. 

Burden  of  proof. — The  burden  of  proving  that  due  notice  was 
given  is  on  the  holder.     Marks  v.  Boone,  24  Fla.  177. 

Where  holder  has  election. — Where  a  note  gives  the  holder  an 
option  to  declare  the  whole  sum  due  upon  default  in  the  payment 
of  interest,  he  must  allege  and  prove  presentment  and  notice  of 
dishonor  in  order  that  he  may  hold  an  indorser.  Galbraith  v. 
Shepard,  43  Wash.  698. 

Anticipating  dishonor. — The  cashier  of  a  bank,  when  informed 
of  an  outstanding  check,  after  it  had  been  placed  in  the  mails  for 
transmission  to  the  drawee  for  payment,  stated  to  the  cashier  of 
the  bank  remitting  the  check  that  it  would  be  paid  if  the  drawer 
had  sufficient  funds  when  the  check  was  received,  otherwise  not: 
Held,  that  such  information  did  not  constitute  a  dishonor  of  the 
check,  so  as  to  require  the  holder  to  give  notice  to  the  indorser 
before  payment  had,  in  fact,  been  refused  on  the  receipt  of  the 
check  by  the  drawee.  Citizens'  Bank  v.  First  Nat.  Bank,  135  Iowa, 
605. 

Guarantors. — The  rule  as  to  notice  does  not  apply  to  guaran- 
tors. Brown  v.  Curtiss,.  2  N.  Y.  225;  Allen  v.  Rightmere,  20 
Johns.  365;  Breed  v.  Hillhouse,  7  Conn.  523;  Roberts  v.  Haw- 
kins, 70  Mich.  566;  Hungerford  v.  O'Brien,  37  Minn.  306.  And 
proceedings  against  the  maker  are  necessary  only  where  there 
is  a  guaranty  of  collection.    Brown  v.  Curtiss,  supra. 

§  90.  By  whom  given. — The  notice  may  be  given  by 
or  on  behalf  of  the  holder,  or  by  or  on  behalf  of  any 
party  to  the  instrument  who  might  be  compelled  to  pay 
it  to  the  holder,  and  who,  upon  taking  it  up,  wonld 
have  a  right  to  reimbursement  from  the  party  to  whom 
the  notice  is  given. 

Who  may  give  notice. — It  was  once  held  that  no  party  could 
give  a  valid  notice  unless  he  was  the  holder  at  the  time.     Tindal 


1G8  THE   NEGOTIABLE  INSTRUMENTS   LAW. 

v.  Brown,  1  Term  Rep.  167.  But  this  doctrine,  after  having  been 
followed  in  other  cases  (Ex  parte  Barclay,  7  Ves.  597;  Stewart  v. 
Kennett,  2  Camp.  177),  was  expressly  overruled  in  the  case  of 
Chapman  v.  Keane  (3  Adol.  &  Ellis,  193),  in  which  most  of  the 
previous  decisions  were  reviewed.  But  notice  by  a  stranger  is  not 
sufficient.  Lawrence  v.  Miller,  16  N.  Y.  235,  237;  Chanoine  v. 
Fowler,  3  Wend.  173 ;  Brailsford  v.  Williams,  15  Md.  151.  And  a 
party  who  has  been  discharged  by  laches,  and  cannot  in  any  event 
bring  an  action  on  the  instrument,  is  deemed  a  stranger  for  this 
purpose.  Harrison  v.  Ruscoe,  15  L.  J.  Exch.  110;  15  M.  &  W. 
231.  A  drawee  who  refuses  acceptance  cannot  give  notice.  Stan- 
ton v.  Blossom,  14  Mass.  116. 

§  91.  Notice  given  by  agent. — Notice  of  dishonor 
may  be  given  by  an  agent  either  in  his  own  name  or  in 
the  name  of  any  party  entitled  to  give  notice,  whether 
that  party  be  his  principal  or  not. 

Bank  as  agent  of  holder. — Banks  as  agents  for  collection  have 
authority  to  receive  and  transmit  notices  on  behalf  of  the  owners 
of  the  paper.  West  River  Bank  v.  Taylor,  34  N.  Y.  128,  130; 
Colt  v.  Noble,  5  Mass.  167;  Haynes  v.  Birks,  3  Bor.  &  Pul.  599; 
Robson  v.  Bennett,  2  Taunt.  388. 

Notary  as  agent. — An  agent  in  giving  notice  represents  and  acts 
on  behalf  of  his  principal,  and  this,  though  he  may  be  a  notary  and 
act  in  his  official  character.     Lawrence  v.  Miller,  16  N.  Y.  235,  238. 

Maker  as  agent  of  holder. — While,  of  course,  the  maker  cannot 
give  notice  in  his  own  behalf,  he  may  do  so  as  agent  of  the  holder. 
Traders'  Nat.  Bank  v.  Jones,  104  App.  Div.  (N.  Y.)  433.  In  the 
case  cited  a  firm  executed  two  promissory  notes  payable  to  the 
order  of  a  member  of  the  firm,  which  notes  were  first  indorsed  by 
J.  and  then  by  the  firm,  and  were  delivered  before  maturity  to  the 
plaintiff  bank.  The  notes  not  being  paid  at  maturity,  notice  of 
protest  was  served  upon  the  firm,  and  with  it,  under  separate 
cover,  addressed  to  J  in  care  of  the  firm,  was  a  notice  of  protest 
directed  to  J,  which  the  firm  were  requested  to  forward  to  him; 
and  the  other  member  of  the  firm  immediately  mailed  such  notice 
to  J.  Held,  that  while  J  was  presumptively  an  accommodation  in- 
dorser  for  the  firm,  and  while  the  firm  could  not,  therefore,  in 


NOTICE   OF   DISHONOR.  169 

their  own  behalf,  give  him  a  valid  notice  of  protest,  they  could 
do  so  on  behalf  of  the  bank,  and  as  its  agents. 

Notice  on  behalf  of  wrong  person. — A  notice  made  out  by  a 
notary  public  and  signed  by  mistake  with  the  name  of  the  maker 
of  the  note  instead  of  with  his  own  name,  without  the  authority  of 
the  maker,  is  insufficient.     Cabot  Bank  v.  Warner,  92  Mass.  522. 

§  92.  Effect  of  notice  given  on  behalf  of  holder.— 
Where  notice  is  given  by  or  on  behalf  of  the  holder,  it 
enures  for  the  benefit  of  all  subsequent  holders  and 
all  prior  parties  who  have  a  right  of  recourse  against 
the  party  to  whom  it  is  given. 

Duty  of  holder. — But  the  holder  is  not  bound  to  give  notice 
to  any  one  but  his  immediate  indorser.  West  River  Bank  v. 
Taylor,  34  N.  Y.  128,  131;  Linn  v.  Horton,  17  Wis.  150,  153. 

§  93.  Effect  where  notice  is  given  by  party  entitled 
thereto. — Where  notice  is  given  by  or  on  behalf  of  a 
party  entitled  to  give  notice,  it  enures  for  the  bene- 
fit of  the  holder  and  all  parties  subsequent  to  the  party 
to  whom  notice  is  given. 

§  94.  When  agent  may  give  notice. — Where  the  in- 
strument has  been  dishonored  in  the  hands  of  an  agent, 
he  may  either  himself  give  notice  to  the  parties  liable 
thereon,  or  he  may  give  notice  to  his  principal.  If  he 
give  notice  to  his  principal,  he  must  do  so  within  the 
same  time  as  if  he  were  the  holder,  and  the  principal, 
upon  the  receipt  of  such  notice,  has  himself  the  same 
time  for  giving  notice  as  if  the  agent  had  been  an  in- 
dependent holder. 

Undue  delay  by  agent. — If  the  agent  has  failed  to  give  notice 
to  his  principal  in  due  time,  the  latter  is  cut  off,  though  he  may 
thereafter  use  due  diligence  in  communicating  notice  to  antecedent 
parties.     Rosson  v.  Carroll,  90  Tenn.  90. 


170  THE   NEGOTIABLE   INSTRUMENTS  LAW. 

Duty  of  bank  receiving  paper  for  collection. — Under  this  sec- 
tion, a  bank  which  holds  paper  for  collection,  properly  discharges 
its  duty  to  its  customer  by  giving  him  notice  of  dishonor  in  time 
to  enable  him  to  give  notice  to  prior  parties.  Brill  v.  Jefferson 
Bank,  159  App.  Div   (N.  Y.)  461. 

§  95.  When  notice  sufficient. — A  written  notice  need 
not  be  signed,  and  an  insufficient  written  notice  may 
be  supplemented  and  validated  by  verbal  communica- 
tion. A  misdescription  of  the  instrument  does  not 
vitiate  the  notice  unless  the  party  to  whom  the  notice 
is  given  is  in  fact  misled  thereby. 

Variant  readings.— In  Kentucky  the  word  "  not  "  after  the 
word  ' '  need  ' '  is  omitted ;  and  the  word  ' '  written  ' '  substituted 
for  "verbal;"  and  the  words  "the  notice"  after  the  word 
"  vitiate  "  in  the  last  sentence,  are  omitted.  In  North  Carolina, 
also  the  words  "  the  notice  "  are  omitted. 

Where  notice  not  signed.— See  Bank  v.  Dibrell,  91  Tenn.  301; 
Spann  v.  Baltzell,  1  Fla.  301;  Kilgore  v.  Bulkley,  14  Conn.  362; 
Tobey  v.  Lenning,  14  Pa.  St.  483. 

Misdescription  of  instrument.— See  Grayson  County  Bank  v. 
Elbert,  143  Ky.  753;  Aiken  v.  Marine  Bank,  16  Wis.  679.  Where 
the  instrument  is  misdeseribed,  the  fact  that  there  is  no  other  in- 
strument to  which  the  notice  could  be  applied  may  be  shown  by 
extrinsic  evidence.  Cayuga  County  Bank  v.  Worden,  6  N.  Y.  19. 
But  a  notice  of  protest  signed  by  a  notary  public,  and  personally 
delivered  by  him  to  the  indorser  is  not  sufficient  to  charge  the 
latter,  where  it  appears  that  the  notice  was  addressed  to  another 
person  than  the  indorser,  and  stated  that  the  holder  looked  to  such 
person  for  the  payment  of  the  note.  Marshall  v.  Sonneman,  216 
Pa.  St.  65.  See  also  Hermann  Lumber  Co.  v.  Bjurstrom,  74  Misc. 
(N.  Y.)  93. 

§  96.  Form  of  notice. — The  notice  may  be  in  writing 
or  merely  oral,  and  may  be  given  in  any  terms  which 
sufficiently  identify  the  instrument,  and  indicate  that 
it  has  been  dishonored  by  non-acceptance  or  non-pay- 


NOTICE   OF   DISHONOR.  171 

ment.   It  may  in  all  cases  be  given  by  delivering  it 
personally  or  through  the  mails. 

Variant  readings. — In  Kentucky  the  words  "  or  mere!;1'  oral  " 
are  omitted. 

Form  of  the  notice. — As  respects  the  form  of  the  notice,  this 
section  makes  no  change  in  the  law.  See  Second  National  Bank 
v.  Smith,  118  Wis.  18;  Sasser  v.  Farmers'  Bank,  4  Md.  409;  Brew- 
ster v.  Arnold,  1  Wis.  264.  A  notice  which  omits  an  essential 
feature  of  the  note,  or  misdescribes  it,  is  an  imperfect  one,  but 
not  necessarily  invalid.  It  is  invalid  only  where  it  fails  to  give 
that  particular  information  which  it  would  have  given  but  for  its 
particular  imperfection;  and  even  in  case  the  notice  in  itself  be 
defective,  if,  from  evidence  aliunde  of  the  attendant  circumstances, 
it  is  apparent  that  the  indorser  was  not  deceived  or  misled  as  to 
the  identity  of  the  dishonored  instrument,  he  will  be  charged. 
Hodges  v.  Schuler,  22  N.  Y.  114;  Artisans'  Bank  v.  Backus,  36 
N.  Y.  106;  Gill  v.  Palmer,  29  Conn.  57;  Howland  v.  Adrian,  29  N. 
J.  Law,  48;  Derham  v.  Donohue,  155  Fed.  Rep.  385.  To  make  the 
notice  defective  the  variance  must  be  such  as  that,  under  the  cir- 
cumstances of  the  case,  it  conveys  no  sufficient  knowledge  to  the 
indorser  of  the  identity  of  the  particular  instrument  which  has 
been  dishonored.  Cayuga  County  Bank  v.  Worden,  1  N.  Y.  413, 
417;  Mills  v.  Bank  of  U.  S.,  11  Wheat.  431;  Bank  of  Alexandria 
v.  Swaim,  9  Peters,  33.  The  notice  is  not  necessarily  defective 
because  it  is  silent  as  to  the  date  and  time  of  payment,  Youngs  v. 
Lee,  12  N.  Y.  551,  or  fails  to  state  that  demand  of  payment  was 
made,  Mills  v.  Bank  of  U.  S.,  11  Wheat.  431,  or  does  not  state  at 
whose  request  it  is  given,  nor  who  is  the  owner  of  the  note.  Shed 
v.  Brett,  1  Pick.  401.  The  term  "protested"  when  contained  in  a 
notice,  with  the  statement  that  the  holder  looks  to  the  indorser 
for  indemnity,  fairly  and  necessarily  implies  that  the  note  or  bill 
has  been  dishonored.  Brewster  v.  Arnold,  1  Wis.  264.  A  note 
is  well  described  when  its  maker,  payee,  date,  amount  and  time 
of  payment  are  stated.  A  printed  notice  is  sufficient,  Cuyler  v. 
Stevens,  4  Wend.  566;  Bank  of  Cooperstown  v.  Woods,  28  N.  Y. 
545,  and  the  signature  of  the  notary  need  not  be  in  writing,  but 
may  be  printed.  Bank  of  Cooperstown  v.  Woods,  28  N.  Y.  561; 
Sussex  Bank  v.  Baldwin,  2  Harr.  (N.  J.),  487.  But  a  notice  which 
is  barely  enough  to  put  the  indorser  upon  inquiry  is  not  sufficient. 


172  THE   NEGOTIABLE   INSTRUMENTS  LAW. 

Cook  v.  Litchfield,  9  N.  Y.  279,  281.     It  must  reasonably  apprise 
the  party  of  the  particular  paper  upon  which  he  is  sought  to  be 
charged.    Home  Insurance  Co.  v.  Greene,  19  N.  Y.  518;  Dodson  v. 
Taylor,  56  N.  J.  Law,  11.     In  the  New  York  case  cited  the  name 
of  the  maker  was  left  blank,  and  it  was  held  that  the  notice  was 
not  sufficient.     Notice  that  a  note  is  unpaid  would  not  necessarily 
imply  that  it  is  dishonored,  because  the  note  might  remain  unpaid, 
while  in  fact  it  may  never  have  been  presented  to  the  maker  for 
payment.     Hunter  v.  Van  Bomhorst,  1  Md.  504,  510.     But  such 
notice  might  be  good  if  the  note  is  payable  at  a  bank.    Id.    If  the 
notice  indicates  that  the  paper  was  presented  before  due,  it  is  not 
sufficient.     Etting  v.  Schuylkill  Bank,  2  Pa.  St.  355.     The  state- 
ment that  the  holder  looks  for  payment  to  the  party  to  whom 
notice  is  sent  is  not  necessary;  for  this  is  implied  from  the  fact 
of  giving  notice,  Bank  of  U.  S.  v.  Carneal,  2  Peters,  543;  Mills  v. 
Bank  of  U.  S.,  11  Wheat.  431,  436 ;  Nelson  v.  First  Nat.  Bank,  29 
U.  S.  App.  554;  69  Fed.  Rep.  798,  801;  16  C.  C.  A.  425;  Cowles 
v.  Horton,  3  Conn.  523.     A  certificate  of  deposit  dated  January  25, 
1904,  and  due  January  25,  1905,  was  duly  presented  for  payment, 
and   payment   refused   on   January   25,   1905;    and   thereupon    a 
notice  of  presentment,  demand,  and  dishonor  was  sent  to,  and 
received  by,  the  indorser.    The  notice  was  dated  January  25,  1904, 
when  it  should  have  been  dated  January  25,  1905,  and  it  stated 
that  the  demand  and  dishonor  were  on  the  day  of  the  date  of  the 
notice,  that  the  certificate  was  dated  January  25,  1905,  when  it 
was  dated  January  25,  1904,  and  it  omitted  to  recite  this  clause 
which  was  in  the  certificate,  "No  interest  after  six  months." — 
Held,  that  the  notice  sufficiently  identified  the  certificate  and  no- 
tified  the   indorser   of   due    presentment,    demand    and    dishonor. 
Derham  v.  Donohue,  155  Fed.  Rep.  385.     See  also  Wilson  v.  Peck, 
66  Misc.  (N.  Y.)  179. 

Question  of  law  or  fact. — Where  there  is  no  dispute  as  to  the 
facts,  the  question  of  the  sufficiency  of  the  notice  is  a  question  of 
law  for  the  court.     Cayuga  County  Bank  v.  Worden,  6  N.  Y.  19. 

Personal  service. — The  provision  of  this  section  respecting  per- 
sonal service  did  not  change  the  rule  as  it  previously  existed. 
Where  personal  service  is  relied  upon,  the  evidence  must  show 
either  actual  personal  service  or  an  ordinarily  intelligent,  diligent 
effort  to  make  personal  service  upon  the  indorser  either  at  his 
place  of  business  during  business  hours,  or  at  his  residence  if  he 


NOTICE   OF   DISHONOR.  173 

have  no  place  of  business;  but  if  he  be  absent,  it  is  not  necessary 
to  call  a  second  time,  and  the  notice  may,  in  that  avent,  be  left 
with  any  one  found  in  charge,  or  if  there  be  no  one  in  charge,  or 
no  one  there,  then  the  giving  of  notice  is  deemed  to  be  waived. 
American  Exchange  National  Bank  v.  American  Hotel  Victoria 
Co.,  103  App.  Div.  (N.  Y.)  372,  374. 

Service  by  mail. — The  rule  of  the  commercial  law  was  well  set- 
tled that  if  the  parties  resided  in  the  same  place  the  notice  must 
be  personal;  that  is,  must  be  given  to  the  individual  or  left  at  his 
domicile  or  place  of  business.     Sheldon  v.  Benham,  4  Hill,  129; 
Brown  v.  Bank  of  Abingdon,  85  Va.  95;  Boyd's  Admr.  v.  City 
Savings  Bank,  15  Gratt.  501,  505;  Bell  v.  Hagerstown  Bank,  7 
Gill,  216;  Westfall  v.  Farwell,  13  Wis.  504,  509.     But  the  courts 
were  inclined  to  restrict  the  general  rule,  and  established  many 
exceptions  to  it.    Bank  of  Columbia  v.  Lawrence,  1  Peters,  578. 
In  the  notes  to  1  American  Lead.  Cas.   (402)  it  is  said:     "It  is 
obvious  that  the  rule  requiring  personal  notice  where  the  parties 
reside  in  the  same  place,  has  lost  its  reasonable  force  and  exists 
only  by  authority.     Instead  of  undermining  it  by  exceptions  that 
conflict  with  it  in  principle  and  render  the  subject  embarrassing 
in  practice,  it  would  be  much  better  to  declare  that  the  rule  itself 
has  become  obsolete  and  is  abolished."     But  it  cannot  properly 
be  said  that  the  rule  had  become  obsolete,  having  been  recognized 
and  acted  on  in  many  recent  as  well  as  older  cases,  and  having 
in  no  case  been  denied  or  disregarded.     It  was,  therefore,  too 
firmly   established  to   be   abolished   by  the   courts.     See   Boyd's 
Admr.  v.  City  Savings  Bank,  15  Gratt.  501,  505.     In  New  York, 
service  by  mail  in  such  cases  was  authorized  by  Laws  1857,  Chap. 
416.     For  the   construction  of  the  former  statute  of  Wisconsin, 
see  Smith  v.  Hill,  6  Wis.  154;  Westfall  v.  Farwell,  13  Wis.  504. 

Notice  over  telephone. — As  under  this  section,  the  notice  may 
be  "in  writing  or  merely  oral,"  a  notice  given  over  the  tele- 
phone may  be  sufficient.  American  Nat.  Bank  v.  Nat.  Fertilizer 
Co.,  125  Tenn.  328. 

Certificate  of  notary. — Where  the  notary's  certificate  contains 
the  statement  that  the  indorsers  were  "  duly  notified  "  an  indor- 
ser,  to  meet  the  evidence  furnished  by  the  certificate,  must  show 
that  he  received  no  notice,  either  personally  or  through  the  mails. 
Zollner  v.  Moffitt,  222  Pa.  St.  544. 


174  THE   NEGOTIABLE  INSTRUMENTS  LAW. 

Kentucky  statute. — In  Kentucky  this  section  and  section  95 
were  amended  so  as  to  require  that  the  notice  shall  be  in  writing. 
Grayson  County  Bank  v.  Elbert,  143  Ky.  753.  As  the  rule  en- 
acted in  the  other  states  was  well  established  by  numerous  de- 
cisions, the  reason  for  destroying  uniformity,  by  making  this 
change  in  the  existing  law,  is  difficult  to  discover. 

§  97.  To  whom  notice  may  be  given. — Notice  of  dis- 
honor may  be  given  either  to  the  party  himself  or  to 
his  agent  in  that  behalf. 

Notice  to  agent. — See  Fassin  v.  Hubbard,  55  N.  T.  465,  471; 
Lake  Shore  National  Bank  v.  Butler  Colliery  Co.,  51  Hun,  63,  68. 
In  Firth  v.  Thrush,  8  Barn.  &  Cress.  387,  the  opinion  was  expressed 
that  authority  to  indorse  negotiable  paper  carried  with  it  author- 
ity to  receive  notice  of  its  dishonor.  And  in  Persons  v.  Kruger,  45- 
App.  Div.  187,  it  was  held  that  a  notice  of  protest  may  be  served 
upon. an  agent  of  the  payee  and  indorser,  where  the  agent  has  au- 
thority to  make  and  indorse  paper,  and  has  authority  to  act  and 
has  acted  as  the  general  agent  of  the  payee  in  the  conduct  of  his 
business,  and  has  had  full  charge  of  the  acts  and  dealings  with  the 
bank  at  which  the  paper  was  discounted  and  the  management  of 
the  paper.  A  notice  of  non-payment  sent  to  the  indorser  inclosed 
under  seal  and  delivered  by  the  messenger  to  one  in  the  employ- 
ment of  the  indorser,  with  directions  not  to  open  it,  is  insufficient. 
Paine  v.  Edsell,  19  Pa.  St.  178. 

§  98.  Notice  where  party  is  dead. — When  any  party 
is  dead,  and  his  death  is  known  to  the  party  giving 
notice,  the  notice  mnst  be  given  to  a  personal  repre- 
sentative, if  there  be  one,  and  if  with  reasonable  dili- 
gence he  can  be  fonnd.  If  there  be  no  personal  repre- 
sentative, notice  may  be  sent  to  the  last  residence  or 
last  place  of  business  of  the  deceased. 

Notice  to  personal  representative. — See  Denninger  v.  Miller,  7 
App.  Div.  (N.  Y.)  409;  Bank  of  Port  Jefferson  v.  Darling,  91  Hun, 
236;  Shoenberger's  Executor  v.  Lancaster  Savings  Institution,  28 
Pa.  St.  459;  Dodson  v.  Taylor,  56  N.  J.  Law,  11;  Massachusetts- 
Bank  v.  Oliver,  10  Cush.  557;  Merchants'  Bank  v.  Birch,  17  Johns. 


NOTICE   OF   DISHONOR.  175 

24.  See  also  Boyd's  Admr.  v.  City  Savings  Bank,  15  Gratt.  501; 
Smalley  v.  Wright,  40  N.  J.  Law,  471;  Goodnow  v.  Warren,  122 
Mass.  82;  Bealls  v.  Peck,  12  Barb.  245;  Cayuga  Co.  Bank  v.  Ben- 
nett, 5  Hill,  236;  Maspero  v.  Pedesclaux,  22  La.  Ann.  227. 

Notice  to  last  residence,  etc.,  of  deceased. — See  Goodnow  v.  War- 
ren, 122  Mass.  82;  Merchants'  Bank  v.  Birch,  17  Johns.  25  Linde- 
man's  Exr.  v.  Guildin,  34  Pa.  St.  54.  The  mailing  of  notice  of 
dishonor  to  an  indorser  known  to  be  dead,  directed  to  a  post  office 
known  to  be  one  at  which  he  had  not  received  his  mail  while  liv- 
ing, is  not  a  good  notice  of  dishonor.  Merchants'  Bank  of  Canada 
v.  Brown,  86  App.  Div.  (N.  Y.)  599. 

§  99.  Notice  to  partners. — Where  the  parties  to  be 
notified  are  partners,  notice  to  any  one  partner  is  notice 
to  the  firm,  even  though  there  has  been  a  dissolution. 

Notice  to  one  partner. — See  Hubbard  v.  Matthews,  54  N.  Y.  43, 
50;  Coster  v.  Thomason,  19  Ala.  717;  Slocomb  v.  Lizardi,  21  La. 
Ann.  355;  Fourth  Nat.  Bank  v.  Henschuh,  52  Mo.  207;  Seldner  v. 
Mount  Jackson  Nat.  Bank,  66  Md.  488.  But  where  partners  give  a 
promissory  note  with  one  of  them  as  maker  and  the  other  as  in- 
dorser, the  latter  is  not  liable  on  his  indorsement  unless  he  be  duly 
notified  of  the  dishonor  of  the  note.  Foland  v.  Boyd,  23  Pa.  St. 
476. 

§  100.  Notice  to  other  joint  parties. — Notice  to  joint 
parties  who  are  not  partners  must  be  given  to  each  of 
them,  unless  one  of  them  has  authority  to  receive  such 
notice  for  the  others. 

Rule  of  common  law. — This  section  does  not  change  the  law. 
See  Shepard  v.  Hawley,  1  Conn.  367;  Boyd  v.  Orton,  16  Wis.  495. 
For  the  distinction  between  parties  who  are  partners  and  joint 
partners,  see  Gates  v.  Beecher,  60  N.  Y.  518,  526.  See  also  Willis 
v.  Green,  5  Hill,  232.  But  see  Sherer  v.  Easton  Bank,  33  Pa.  St. 
134;  Jarnigan  v.  Stratton,  95  Tenn.  619.  For  a  case  applying  the 
statute,  see  Feigenspan  v.  McDonnell,  201  Mass.  341. 

§  101.  Notice  to  bankrupt. — Where  a  party  has  been 
adjudged  a  bankrupt  or  an  insolvent,  or  has  made  an 


176  THE   NEGOTIABLE  INSTRUMENTS  LAW. 

assignment  for  the  benefit  of  creditors,  notice  may  be 
given  either  to  the  party  himself  or  to  his  trustee  or 
assignee. 

Rule  at  common  law. — In  Callahan  v.  Kentucky  Bank,  82  Ky. 
231,  it  was  decided  that  where  the  indorser  had  made  a  voluntary 
assignment  for  the  benefit  of  creditors,  notice  to  the  assignee 
would  bind  the  indorser  and  his  estate.  And  a  similar  rule  was 
adopted  by  the  Supreme  Court  of  Tennessee  in  American  Nat. 
Bank  v.  Junk  Bros.,  94  Tenn.  634.  On  the  other  hand,  the  Su- 
preme Court  of  Ohio,  in  House  v.  Vinton,  43  Ohio  St.,  346,  by  a 
majority  opinion,  declined  to  adopt  this  rule,  making  a  distinction 
between  an  assignee  under  a  voluntary  general  assignment  and  an 
assignee  in  bankruptcy.  In  this  latter  case,  however,  there  is  a 
strong  dissenting  opinion  by  two  of  the  judges  of  that  court,  in 
which  the  soundness  of  the  rule  as  announced  by  the  Kentucky 
court  is  earnestly  insisted  upon. 

§  102.  Time  within  which  notice  to  be  given. — No- 
tice may  be  given  as  soon  as  the  instrument  is  dis- 
honored; and  unless  delay  is  excused  as  hereinafter 
provided,  must  be  given  within  the  times  fixed  by  this 
act. 

Hour  at  which  notice  may  be  sent. — The  holder  need  not  wait 
until  the  close  of  business  hours,  but  may  send  notice  at  once. 
Bank  of  Alexandria  v.  Swan,  9  Peters,  33;  Lenox  v.  Roberts,  2 
Wheat.  373;  Ex  parte  Moline,  19  Ves.  216;  Whitwell  v.  Brigham,19 
Pick.  117;  Coleman  v.  Carpenter,  9  Pa.  St.  178. 

§  103.  Where  parties  reside  in  same  place. — Where 
the  person  giving  and  the  person  to  receive  notice 
reside  in  the  same  place,  notice  must  be  given  within 
the  following  times: 

1.  If  given  at  the  place  of  business  of  the  person  to 
receive  notice,  it  must  be  given  before  the  close  of 
business  hours  on  the  day  following; 

2.  If  given  at  his  residence,  it  must  be  given  before 
the  usual  hours  of  rest  on  the  day  following; 


NOTICE   OF   DISHONOR.  177 

3.  If  sent  by  mail,  it  must  be  deposited  in  the  post- 
office  in  time  to  reach  him  in  usual  course  on  the  day 
following. 

Variant  readings. — In  Rhode  Island,  subdivision  two  reads  as 
follows:  "  If  given  at  his  residence,  it  must  be  given  before  ten 
o'clock  in  the  evening  of  the  day  following." 

Notice  to  place  of  business. — See  Adams  v.  Wright,  14  Wis.  408 ; 
Cayuga  County  Bank  v.  Hunt,  2  Hill,  236;  Marks  v.  Boone,  24 
Fla.  177;  Bell  v.  Hagerstown  Bank,  7  Gill,  216;  Daniel  on  Neg. 
Insts.,  section  1038.  The  notice  must  follow  upon  the  first  de- 
mand.    Rosson  v.  Carroll,  90  Tenn.  90. 

Notice  at  residence. — See  Phelps  v.  Stocking,  21  Neb.  444;  Darb- 
ishire  v.  Parker,  6  East.  8.  While  service  at  the  place  of  business 
must  be  during  business  hours,  service  at  the  residence  is  not  so 
regulated.  It  will  be  sufficient  if  made  during  any  of  the  hours 
when  members  of  household  are  attending  to  their  ordinary  af- 
fairs. Adams  v.  Wright,  14  Wis.  408.  If  the  service  is  properly 
made  at  the  place  of  business  or  residence,  it  is  immaterial  that 
the  party  to  be  notified  did  not  in  fact  receive  the  notice.  Adams 
v.  Wright,  14  Wis.  408. 

Notice  by  mail. — For  a  case  applying  this  provision  of  the  sec- 
tion, see  Seigel  v.  Dubinsky,  56  Misc.  (N.  Y.)  681. 

Notice  by  telegraph. — Notice  of  the  dishonor  of  a  bank  check 
given  by  telegraph  on  the  second  day  following  the  deposit  of  the 
check  for  collection,  and  immediately  after  the  depositor  received 
notice  of  such  dishonor  is  good;  for  under  sections  103  and  104 
the  bank  has  until  the  day  following  to  give  notice  of  the  dis- 
honor, and  by  section  107  the  depositor  has  until  the  day  follow- 
ing receipt  of  notice  to  notify  antecedent  parties.  Jurgens  v. 
Wichmann,  124  App.  Div.   (N.  Y.)   531. 

§  104.  Where  parties  reside  in  different  places. — 
Where  the  person  giving  and  the  person  to  receive 
notice  reside  in  different  places,  the  notice  must  be 
given  within  the  following  times: 

1.  If  sent  by  mail,  it  must  be  deposited  in  the  post- 
office  in  time  to  go  by  mail  the  day  following  the  day 
12 


178  THE   NEGOTIABLE  INSTRUMENTS   LAW. 

of  dishonor,  or  if  there  be  no  mail  at  a  convenient  hour 
on  that  day,  by  the  next  mail  thereafter. 

2.  If  given  otherwise  than  through  the  post-office, 
then  within  the  time  that  notice  would  have  been  re- 
ceived in  due  course  of  mail,  if  it  had  been  deposited 
in  the  post-office  within  the  time  specified  in  the  last 
subdivision. 

Variant  readings. — In  Kansas,  Nebraska  and  Ohio,  the  words 
"  in  next  preceding  paragraph  of  this  section  "  are  substituted 
for  the  words  "  last  subdivision." 

By  what  mail  to  be  sent. — Sanderson  v.  Sanderson,  20  Fla.  292 ; 
Rosson  v.  Carroll,  90  Tenn.  90;   Stephenson  v.  Dickson,  24  Pa. 
St.    148;     Whitwell    v.     Johnson,    17    Mass.     449.       In     Smith 
v.    Poillon,    87    N.  Y.    590,    597,    Earl,    J.,    said:      "  From    a 
careful   examination   of   all   these    authorities   and  many   others, 
it    is    clear    that    the    law    is    not    precisely    settled.     It     ap- 
pears   that    at    first    it    was    supposed    to    be    necessary   that 
notice  of    dishonor   should    be    given    by    the  next   post    after 
dishonor,  on  the  same  day,  if  there  was  one.     That  rule  was  found 
inconveniently  stringent,  and  then  it  was  held  that  when  the  par- 
ties lived  in  different  places,  between  which  there  was  a  mail, 
the  notice  could  be  posted  the  next  day  after  the  dishonor  or 
notice  of  dishonor.     Some  of  the  authorities  hold  that  the  party 
required  to  give  the  notice  may  have  the  whole  of  the  next  day. 
Some  of  them  hold  that  when  there  are  several  mails  on  the  next, 
day,  it  is  sufficient  to  send  the  notice  by  any  post  of  that  day. 
Other  authorities  lay  down  the  rule,  in  general  terms,  that  the 
notice  must  be  posted  by  the  first  practical  and  convenient  mail 
of  the  next  day;  and  that  rule  seems  to  be  supported  by  the  most 
authority  in  this  state.     What  is  a  practical  and  convenient  mail 
depends  upon  circumstances.     It  may  be  controlled  by  the  usages 
of  business  and  the  customs  of  the  people  at  the  place  of  mailing, 
and  the  condition,  situation  and  business  engagements  of  the  per- 
son required  to  give  the  notice.     The  rule  should  have  a  reason- 
able  application  in  every  case,  and  whether  sufficient  diligence 
has  been  used  to  mail  the  notice,  the  facts  being  undisputed,  is 
a  question  of  law."    But  see  Burgess  v.  Vreeland,  4  Zab.  (N.  J.) 
71;  Winans  v.  Davis,  3  Harr.   (N.  J.)  276.     Where  the  notice  has 
not  arrived  at  as  early  a  date  as  in  the  regular  course  of  the  mail 


NOTICE   OF   DISHONOR.  179 

it  might  have  come,  if  started  at  the  proper  time,  the  onus  is  upon 
the  plaintiff  to  prove  that  it  was  put  in  the  mail  at  the  proper  time. 
Friend  v.  Wilkinson,  9  Gratt.  31. 

Where  notice  not  sent  by  mail. — See  Bank  of  Columbia  v.  Law- 
rence, 1  Peters,  578;  Jarvis  v.  St.  Croix  Mfg.  Co.,  23  Me.  287. 

§  105.  Miscarriage  in  mails — notice  deemed  to  have 
been  given. — Where  notice  of  dishonor  is  duly  ad- 
dressed and  deposited  in  the  post-office,  the  sender  is 
deemed  to  have  given  due  notice,  notwithstanding  any 
miscarriage  in  the  mails. 

Rule  at  common  law. — This  section  makes  no  change  in  the  law. 
See  Windham  Bank  v.  Norton,  22  Conn.  213;  Pier  v.  Heinrichsof- 
fen,  67  Mo.  163;  Bell  v.  Hagerstown  Bank,  7  Gill.  216;  Sasscer  v. 
Farmers'  Bank,  4  Md.  409;  Cook  v.  Foraker,  193  Pa.  St.  461.  In 
Shed  v.  Brett,  1  Pick.  401,  410,  it  was  said :  ' '  The  mail  being  estab- 
lished by  standing  laws  of  the  Government  for  the  purpose  princi- 
pally of  facilitating  the  transmission  of  mercantile  correspondence, 
it  being  by  far  the  most  usual  conveyance  of  letters  and  generally 
the  most  sure  as  to  time,  and  safe  in  every  other  respect,  all  men 
who  deal  in  mercantile  paper  are  presumed  to  assent,  and  even 
expect,  that  such  information  as  they  may  want  will  be  communi- 
cated in  this  way.  And  thus  the  post-office  becomes  their  agent; 
and  if  it  happens  to  fail  from  any  unexpected  cause,  he  who 
made  the  right  use  of  it  by  placing  his  letter  there  properly  di- 
rected has  done  ail  his  duty,  and  the  consequences  must  fall  upon 
him  who  has  to  receive."  For  cases  applying  this  section,  see  Zoll- 
ner  v.  Moffitt,  222  Pa.  St.  644;  First  Nat.  Bank  v.  Star  Watch 
Case  Co.,  153  N.  W.  Rep.  (Mich.)  722. 

Insufficient  postage. — If  undue  delay  in  giving  the  notice  is 
caused  by  insufficient  postage,  the  notice  is  not  good.  First  Nat. 
Bank  v.  Miller,  139  Wis.  126.  Thus,  the  notice  was  held  to  be  in- 
effective where  it  was  deposited  with  insufficient  postage  in  the 
post-office  after  ordinary  business  hours  and  the  close  of  mail  on 
the  business  day  succeeding  dishonor,  and  was  not  again  sent  out 
with  sufficient  postage  until  five  days  after  its  return  by  the  postal 
authorities.    Id. 


ISO  THE   NEGOTIABLE   INSTRUMENTS   LAW. 

§  106.  Deposit  in  post-office — what  constitutes. — 
Notice  is  deemed  to  have  been  deposited  in  the  post- 
office  when  deposited  in  any  branch  post-office  or  in  any 
letter-box  under  the  control  of  the  post-office  depart- 
ment. 

Rule  at  common  law. — The  practice  authorized  by  this  section 
was  approved  in  a  number  of  cases.  See  Nat.  Bank  v.  Shaw,  79 
Me.  376;  Pearce  v.  Langfit,  101  Pa.  St.  507;  Johnson  v.  Brown, 
154  Mass.  105;  Skilbeck  v.  Garbett,  7  Q.  B.  846.  In  some  cases  it 
had  been  held  that  delivery  to  a  letter  carrier  was  sufficient. 
Pearce  v.  Langfit,  101  Pa.  St.  507;  Shoemaker  v.  Mechanics'  Bank, 
59  Pa.  St.  79.  But  it  was  not  deemed  wise  to  adopt  this  rule  in 
the  statute. 

Proof  of  deposit  in  post-office. — The  fact  that  the  notice  was 
deposited  with  the  post-office  may  be  proved  like  other  facts,  by 
either  direct  or  circumstantial  evidence.  It  may  be  shown  by  the 
testimony  of  the  person  who  deposited  it,  or  by  proof  of  facts 
from  which  it  may  be  reasonably  inferred  that  it  was  so  deposited. 
Central  National  Bank  v.  Stoddard,  83  Conn.  332.  In  an  action 
against  an  indorser,  evidence  tending  to  show  that  he  did  not  re- 
ceive notice  of  dishonor  is  competent  upon  the  question  as  to 
whether  notice  was  ever  mailed  to  him,  and  the  exclusion  of  such 
evidence  is  error.  Union  Bank  v.  Deshel,  139  App.  Div.  (N. 
Y.)  217. 

Presumption  as  to  delivery. — A  notice  placed  in  a  mail  chute 
under  the  control  of  the  post-office  department  in  the  city  of  New 
York  on  the  day  of  protest  and  postmarked  the  following  day  at 
noon  will  be  presumed,  in  the  absence  of  evidence  to  the  contrary, 
to  have  been  delivered  before  the  close  of  business  on  that  day, 
as  required  by  section  103.    Wilson  v.  Peck,  66  Misc.  (N.  Y.)  179. 

§  107.  Notice  to  antecedent  parties — time  of. — 
Where  a  party  receives  notice  of  dishonor,  he  has,  af- 
ter the  receipt  of  such  notice,  the  same  time  for  giving 
notice  to  antecedent  parties  that  the  holder  has  after 
the  dishonor. 


NOTICE   OF   DISHONOR.  181 


Rula  at  common  law. — This  section  does  not  change  the  law. 
See  Howland  v.  Adrian,  29  N.  J.  Law,  41;  Howard  v.  Ives,  1 
Hill,  263;  Jameson  v.  Swinton,  2  Taunt.  224;  Shelburne  Falls  Na- 
tional Bank  v.  Townsley,  102  Mass.  177;  Seaton  v.  Scovill,  IS 
Kans.  435;  Haly  v.  Brown,  5  Pa.  St.  178;  Etting  v.  Schuylkill 
Bank,  2  Pa.  St.  355;  Struthers  v.  Blake,  30  Pa.  St.  139;  Bray  v. 
Hadwen,  5  Maule  &  Sel.  68;  Linn  v.  Horton,  17  Wis.  150. 

Notice  to  immediate  indorser. — If  the  holder  of  an  indorsed 
bill  or  note  chooses  to  rely  upon  the  responsibility  of  his  immediate 
indorser,  there  is  no  necessity  for  his  giving  notice  to  any  previous 
party;  and  if  such  notice  be  properly  given  in  time,  by  the  other 
parties,  it  will  enure  to  the  benefit  of  the  holder  and  he  may  re- 
cover thereon  against  any  of  them.  Thus,  if  the  holder  notifies 
the  sixth  indorser,  and  he  the  fifth,  and  so  on  to  the  first,  the  latter 
will  be  liable  to  all  the  parties.  And  it  is  no  objection  to  such 
notice  that  it  is  not  in  fact  received  by  the  first  or  any  prior  in- 
dorser, as  soon  as  if  it  had  been  transmitted  directly  by  the  holder 
or  notary,  provided  it  has  been  seasonably  sent  by  each  indorser 
as  he  received  it.  Colt  v.  Noble,  5  Mass.  167;  Mead  v.  Engs,  5 
Cow.  303;  Howard  v.  Ives,  1  Hill,  263. 

Degree  of  diligence  required. — The  same  degree  of  diligence 
must  be  exercised  on  the  part  of  the  indorser  in  forwarding  notice 
as  is  required  of  the  holder.  Ordinary  diligence  must  be  used  in 
both  cases.  He  is  not  bound  to  forward  notice  on  the  very  day 
upon  which  he  receives  it,  but  may  wait  until  the  next.  See  cases 
above  cited.  See  also  Williams  v.  Paintsville  Nat.  Bank,  143 
Ivy.  786.  The  holder  of  a  check  indorsed  and  deposited  the  same 
in  his  bank  for  collection  on  July  28th.  On  July  29th,  he  was 
notified  by  the  bank  that  the  check  had  been  dishonored,  and  on 
July  30th,  he  notified  the  payee  by  telegraph:  Held,  that  the 
notice  was  in  due  time  under  this  section.  Jurgens  v.  Wichmann, 
124  App.  Div.  (N.  Y.)  531. 

Bank  holding  paper  for  collection. — A  bank  holding  for  collec- 
tion a  note  which  has  been  dishonored,  is  required  to  give  notice 
to  only  its  own  principal,  and  he  in  turn  to  give  notice  to  his  prin- 
cipal, and  so  on  down  the  line  of  indorsers.  Gleason  v.  Thayer, 
87  Conn.  248;  Shea  v.  Vahey,  215  Mass.  80. 

Where  indorser  is  liable  for  only  part  of  debt.— The  application 
of  mis   section  is  not   confined   to   those   who   are   antecedent  in 


182  THE   NEGOTIABLE  INSTRUMENTS  LAW. 

liability  as  to  the  whole  of  the  debt,  but  it  applies  as  to  all  who 
are  antecedent  as  to  any  part  of  it.  Williams  v.  Paintsville  Nat. 
Bank,  143  Ky.  786. 

§  108.  Where  notice  must  be  sent. — Where  a  party- 
has  added  an  address  to  his  signature,  notice  of  dis- 
honor must  be  sent  to  that  address;  but  if  he  has  not 
given  such  address,  then  the  notice  must  be  sent  as 
follows : 

1.  Either  to  the  post-office  nearest  to  his  place  of 
residence,  or  to  the  post-office  where  he  is  accustomed 
to  receive  his  letters ;  or 

2.  If  he  live  in  one  place,  and  have  his  place  of 
business  in  another,  notice  may  be  sent  to  either  place ; 
or 

3.  If  he  is  sojourning  in  another  place,  notice  may  be 
sent  to  the  place  where  he  is  sojourning. 

But  where  the  notice  is  actually  received  by  the 
party  within  the  time  specified  in  this  act,  it  will  be 
sufficient,  though  not  sent  in  accordance  with  the  re- 
quirements of  this  section. 

Where  address  is  added  to  signature. — See  Bartlett  v.  Robinson, 
39  N.  Y.  187.  In  this  case  the  indorsement  was  in  the  following 
form:  "Chas.  Robinson,  214  E.  18th  Street."  The  notice  of  dis- 
honor sent  through  the  post-office  was  addressed  "Chas.  Robinson, 
Esq.,  City  of  New  York,"  and  was  not  received  by  the  indorser. 
Held,  that  he  was  discharged.  For  cases  applying  the  statute, 
see  Archuleta  v.  Johnston,  53  Colo.  393;  Century  Bank  v.  Breit- 
bart,  89  Misc.  (N.  Y.)  308. 

Nearest  post-office. — See  Bank  of  Columbia  v.  Lawrence,  1 
Peters,  578;  National  Bank  v.  Cade,  73  Mich.  449;  Northwestern 
Coal  Co.  v.  Bowman,  69  Iowa  150;  Mercer  v.  Lancaster,  5  Pa.  St. 
160;  Woods  v.  Neeld,  44  Pa.  St.  86;  Haly  v.  Brown,  5  Pa.  St.  178; 
Rand  v.  Reynolds,  2  Gratt,  171.  But  if  sufficient  inquiries  have 
been  made,  and  information  received  on  which  the  holder  has  a 
right  to  rely,  a  mistake  as  to  the  nearest  or  usual  post-office  does 
not  release  the  indorser.  Moore  v.  Hardcastle,  11  Md.  486.    For  a 


NOTICE  OF  DISHONOR.  183 

case  where  the  indorser  received  his  mail  at  two  post-offices,  see 
Shelburne  Falls  Nat.  Bank  v.  Townsley,  107  Mass.  444.  A  notice 
addressed  to  the  indorser  at  ''New  York"  is  insufficient  where 
there  is  no  evidence  that  he  lived,  ever  had  lived,  or  was  sojourn- 
ing in  New  York,  and  no  inquiry  was  made  to  ascertain  whether 
suck  was  the  fact.  Fonseca  v.  Hartman,  84  N.  Y.  Supp.  131.  See 
also  Dupont  de  Nernour  Powder  Co.  v.  Rooney,  63  Misc.  (N.  Y.) 
344. 

Where  place  of  residence  and  "business  are  different. — Bank  of 
U.  S.  v.  Carneal,  2  Peters,  549;  Williams  v.  Bank  of  U.  S.,  2 
Peters,  96;  Montgomery  Co.  Bank  v.  Marsh,  7  N.  Y.  481.  The 
rule  that  notice  might  be  served  at  the  place  of  business,  as  well 
as  at  the  residence,  was  not  changed  by  the  former  statute  of 
Wisconsin,  Laws  1861,  Ch.  79.     Simus  v.  Larkin,  19  Wis.  390. 

Place  of  sojourn.— Chouteau  v.  Webster,  6  Mete.  1;  Young  v. 
Burgin,  15  Gray,  264;  Bigley's  Adm'r  v.  Cluff,  16  Gratt.  284,  291- 
292.  The  stability  of  residence  acquired  under  laws  relating  to 
taxation  and  the  settlement  of  paupers  is  not  necessary  when 
ascertaining  the  abode  of  an  indorser  for  the  purpose  of  giving 
him  notice  of  dishonor  by  mail.  He  may  have  a  residence  for  this 
purpose  at  two  places  at  the  same  time,  and,  in  such  case,  notice 
to  him  at  either  place  will  be  sufficient.  Lowell  Trust  Company 
v.  Pratt,  183  Mass.  379,  381. 

Where  notice  is  misdirected. — A  notice  addressed  on  its  face, 
by  mistake,  to  the  maker  instead  of  the  indorsee,  but  inclosed  in 
an  envelope  properly  addressed  to  the  indorsee,  and  received  by 
him,  is  sufficient.    Wilson  v.  Peck,  66  Misc.  (N.  Y.)  179. 

Where  notice  is  actually  received. — Although  the  residence  or 
place  of  business  is  the  usual  and  proper  place  for  giving  notice, 
it  will  be  good  if  actually  given  anywhere.  Dickens  v.  Hall,  87 
Pa.  St.  379,  380.  If  the  party  to  be  charged  receives  the  notice 
in  due  time  he  cannot  object  to  the  means  employed.  Terbell  v. 
Jones,  15  Wis.  235;  Whitford  v.  Burckmeyer,  1  Gill,  127.  But 
if  the  holder  employs  other  means  than  the  mail  he  does  so  at  his 
own  risk.  Id.  Notice  sent  by  telegraph,  for  example,  would  be 
sufficient  if  actually  received,  and  an  omission  to  post  the  notice 
in  due  season  might  be  corrected  in  this  way.  Jurgens  v.  Wick- 
man,  124  App.  Div.  (N.  Y.)  531.    Or  in  such  ease,  notice  might  be 


L84  THE  NEGOTIABLE  INSTRUMENTS  LAW. 

given  by  telephone.     American  Nat.  Bank  v.  Fertilizer  Co.,  125 
lenn.  328. 

§  109.  Waiver  of  notice. — Notice  of  dishonor  may  be 
waived,  either  before  the  time  of  giving  notice  has 
arrived,  or  after  the  omission  to  give  due  notice,  and 
the  waiver  may  be  express  or  implied. 

Rule  at  common  law. — The  statute  has  not  changed  the  law 
respecting  waiver.  First  Nat.  Bank  v.  Gridley,  112  App.  Div.  (N. 
F.)  398;  Eobinson  v.  Barnett,  19  Fla.  670.  It  was  well  settled  that 
if  an  indorser  with  full  knowledge  of  the  laches  of  the  holder  in 
oeglecting  to  protest  a  bill  or  note,  unequivocally  assents  to  con- 
tinue his  liability,  or  to  be  responsible,  as  though  due  protest  had 
been  made,  he  is  held  to  have  waived  the  right  to  object,  and  will 
stand  in  the  same  position  as  if  he  had  been  regularly  charged  by 
presentment,  demand  and  notice. 

How  assent  established. — The  assent  must  be  clearly  established,, 
and  will  not  be  inferred  from  doubtful  or  equivocal  acts  or  lan- 
guage. It  has  been  frequently  held  that  a  promise  by  the  indorser 
to  pay  the  note  or  bill,  after  he  has  been  discharged  by  the  failure 
to  protest  it,  will  bind  the  indorser,  provided  he  had  full  knowledge 
of  the  laches  when  the  promise  was  made.  A  promise  made  under 
those  circumstances  affords  the  clearest  evidence  that  the  indorser 
does  not  intend  to  take  advantage  of  the  laches  of  the  holder;  and 
the  law,  without  any  new  consideration  moving  between  the  par- 
ties, gives  effect  to  the  promise.  The  assent  of  the  indorser  to  be 
bound,  notwithstanding  he  has  not  been  duly  charged,  may  be  es- 
tablished by  any  transaction  between  him  and  the  holder,  which 
clearly  indicates  this  purpose  and  intention.  Ross  v.  Hurd,  71  N. 
Y.  14,  18 ;  Turnbull  v.  Maddux,  68  Md.  579 ;  Lewis  v.  Brehme,  33 
Md.  412 ;  Bank  v.  Dibbrell,  91  Tenn.  301 ;  Low  v.  Howard,  10  Cush. 
159;  Smith  v.  Lownsdale,  6  Oregon,  78;  Whittaker  v.  Morrison,  1 
Fla.  25. 

Knowledge  of  facts. — It  must  appear  that  the  indorser  had 
knowledge  of  the  fact  that  the  holder  was  in  default.  Thornton 
v.  Wynn,  12  Wheat.  183 ;  Hunter  v.  Hook,  64  Barb.  469 ;  Nevins  v. 
Moore,  221  Mo.  331;  Gawtry  v.  Doane,  48  Barb.  148;  Schierl  v. 
Baumel,  75  Wis.  75;  Glaser  v.  Rounds,  16  R.  I.  235;  Aebi  v.  Bank 


NOTICE    OF   DISHONOR.  185 

of  Evansville,  124  Wis.  73,  81.  And  in  Massachusetts  it  is  held 
that  knowledge  on  the  part  of  an  indorser  that  demand  upon  the 
maker  has  not  been  made  is  material,  and  must  be  proved,  notwith- 
standing the  fact  that  he  knew  that  the  note  had  not  been  paid,  and 
that  notice  of  non-payment  had  not  been  given,  and  was  aware  that 
he  was  discharged  from  all  liability.  Parks  v.  Smith,  155  Mass.  26, 
33 ;  Garland  v.  Salem  Bank,  9  Mass.  408 ;  Low  v.  Howard,  10  Cush. 
159 ;  S.  C,  11  Cush.  263 ;  Kelley  v.  Brown,  5  Gray,  108. 

Mistake  of  law. — But  where  the  indorser  is  fully  apprised  of 
the  facts,  he  is  bound  by  the  waiver,  though  made  in  ignorance  of 
its  legal  effect.     Toole  v.  Crafts,  193  Mass.  110. 

Implied  waiver. — See  Jenkins  v.  White,  147  Pa.  St.  303. 

Evidence  of  waiver. — A  waiver  will  not  be  presumed  without 
the  most  satisfactory  proof.  Lockwood  v.  Crawford,  18  Conn.  374. 
But  it  is  not  essential  that  the  waiver  be  in  writing.  When  the  fact 
is  established  by  competent  evidence,  a  parol  waiver  is  as  valid  and 
binding  as  a  written  one.  The  only  difference  is  in  the  character 
of  the  proof.  Annville  National  Bank  v.  Kettering,  106  Pa.  St. 
531,  534. 

Part  payment  by  indorser. — A  part  payment  of  a  note  by  an 
indorser,  not  explained  or  qualified  by  any  accompanying  circum- 
stances, will  be  held  to  be  sufficient  evidence  of  waiver  of  notice. 
Whittaker  v.  Morrison,  1  Pla.  25. 

Where  indorser  has  taken  security. — The  fact  that  the  indorser 

holds  security  to  indemnify  him  against  loss  upon  his  indorsement 
does  not  dispense  with  the  necessity  for  notice.  Pirst  Nat.  Bank  of 
Binghampton  v.  Baker,  163  App.  Div.  (N.  Y.)  72;  Moore  v.  Alex- 
ander, 63  Id.  100;  Whitney  v.  Collins,  15  E.  I.  44.  But  see  Brown 
v.  Maffey,  15  East.  222;  Bond  v.  Farnham,  5  Mass.  170;  Haskell  v. 
Boardman,  8  Allen,  38;  Smith  v.  Lownsdale,  6  Ore.  78. 

Question  for  jury. — As  to  when  question  of  waiver  is  for  the 
jury,  see  Valley  Nat.  Bank  v.  Uhler,  191  Pa.  St.  365 ;  Jones  v.  Hub- 
erts, 191  Pa.  St.  152. 

Pleading. — The  facts  constituting  the  waiver  must  be  alleged 
in  the  pleading.  Congress  Brewing  Co.  v.  Habenicht,  83  App.  Div. 
(N.  Y.)  141. 


18G  THE   NEGOTIABLE  INSTRUMENTS   LAW. 

When  demand  is  waived.— As  the  conditions  upon  which  an  in- 
dorser  is  liable,  viz.,  (1)  that  there  shall  be  demand  upon  the  party 
primarily  liable,  and  (2)  that  if  the  paper  be  dishonored  due  notice 
be  given  to  the  indorser,  are  distinct  and  independent  of  each  other, 
a  waiver  of  demand  is  not  a  waiver  of  notice  of  dishonor.  Hall  v. 
Crane,  213  Mass.  326.  But  see  Baumeister  v.  Kuntz,  53  Fla.  340 ; 
Dye  v.  Scott,  35  Ohio  St.  194. 

§  110.  Parties  affected  by  waiver.— Where  the  waiver 
is  embodied  in  the  instrument  itself,  it  is  binding  upon 
all  parties;  but  where  it  is  written  above  the  signature 
of  an  indorser,  it  binds  him  only. 

Waiver  in  body  of  instrument.— See  Phillips  v.  Dippo,  93  Iowa, 
35 ;  Smith  v.  Pickham,  8  Tex.  Civ.  App.  326 ;  Bryant  v  Merchants' 
Bank,  8  Bush.  43 ;  Lowry  v.  Steele,  27  Ind.  168 ;  Farmers'  Bank  of 
Kentucky  v.  Ewing,  78  Ky.  264;  Bryant  v.  Taylor,  19  Minn.  396. 
A  waiver  inserted  in  the  body  of  the  paper  becomes  a  part  of  the  con- 
tract of  the  indorser  as  well  as  of  the  maker.  Owensboro  Savings 
Bank  v.  Haynes,  143  Ivy.  534. 

Waiver  written  above  signature. — Woodman  v.  Thurston,  8 
Cush.  157 ;  Farmers'  Bank  v.  Ewing,  78  Ky.  264. 

§  111.  Waiver  of  protest. — A  waiver  of  protest, 
whether  in  the  case  of  a  foreign  bill  of  exchange  or 
other  negotiable  instrument,  is  deemed  to  be  a  waiver 
not  only  of  a  formal  protest,  but  also  of  presentment 
and  notice  of  dishonor. 

Reason  for  the  rule. — While  in  a  strict  and  technical  sense  the 
term  protest  when  used  in  reference  to  commercial  paper  means 
only  the  formal  declaration  drawn  up  and  signed  by  a  notary,  yet 
in  a  popular  sense,  and  as  used  among  men  of  business,  it  includes 
all  the  steps  necessary  to  charge  an  indorser;  and  in  waiving  pro- 
test an  indorser  is  supposed  to  use  in  it  this  sense.  Coddington  v. 
Davis,  1  N.  Y.  186,  189-190 ;  Annville  Nat.  Bank  v.  Kettering,  106 
Pa.  St.  531;  First  Nat.  Bank  v.  Schreiner,  110  Pa.  St.  188;  Con- 
tinent Life  Ins.  Co.  v.  Barber,  50  Conn.  567;  First  Nat.  Bank  v. 
Falkenham,  94  Cal.  141;  Brewster  v.  Arnold,  1  Wis.  264;  Wilkie  v. 


NOTICE   OP  DISHONOR.  187 

Chandon,  1  Wash.  355.  For  cases  applying  this  section,  see  Bell- 
Knox  Coal  Co.  v.  Gregory,  152  Ivy.  413;  Bank  of  Montpelier  v. 
Montpelier  Lumber  Co.,  16  Idaho,  730. 

Extent  of  waiver. — But  the  waiver  will  not  be  extended  beyond 
the  fair  import  of  the  terms ;  and  hence,  a  waiver  of  "  notice  of 
protest "  will  not  be  deemed  a  waiver  of  demand.  Sprague  v. 
Fletcher,  8  Oregon,  367. 

Pleading.- — In  construing  a  pleading  a  more  technical  rule  "will 
be  applied,  and  an  allegation  that  the  instrument  was  duly  protested 
will  not  be  held  to  comprehend  an  averment  that  notice  of  dis- 
honor was  given  to  the  indorser.  Cook  v.  Warren,  88  N.  Y.  37. 
Contra,  Gleason  v.  Thayer,  .87  Conn.  248.  And  it  has  been  held  that 
an  averment  in  an  affidavit  of  defense  that  the  note  sued  on  was  not 
protested,  or  notice  of  protest  given,  is  not  sufficient,  for  the  note 
may  have  been  presented  and  notice  of  nonpayment  given  without 
any  formal  protest  having  been  made.  First  Nat.  Bank  v.  Tustin, 
246  Pa.  151. 

§  112.  When  notice  is  dispensed  with. — Notice  of  dis- 
honor is  dispensed  with  when,  after  the  exercise  of 
reasonable  diligence,  it  cannot  be  given  to  or  does  not 
reach  the  parties  sought  to  be  charged. 

Where  principal  obligor  is  dead. — The  fact  that  the  holder  is 
excused  from  making  presentment  for  payment  under  section  76 
because  the  principal  obligor  is  dead,  does  not  relieve  him  from  the 
duty  of  giving  notice  of  dishonor  to  the  indorser.  Beed  v.  Spear, 
107  App.  Div.  (N.  Y.)  144. 

Reasonable  diligence. — See  Hobbs  v.  Straine,  149  Mass.  212; 
Staylor  v.  Ball,  24  Md.  183;  Eeed  v.  Spear,  107  App.  Div.  (N.  Y.) 
144 ;  Fonseca  v.  Hartman,  84  N.  Y.  Supp.  131 ;  Siegel  v.  Dubinsky, 
56  Misc.  (N.  Y.)  681.  Reasonable  diligence  is  all  that  is  required. 
The  law  does  not  exact  every  possible  exertion  which  might  have 
been  made  to  effect  notice  of  the  dishonor  of  the  paper.  Bank  of 
Port  Jefferson  v.  Darling,  91  Hun,  236.  But,  as  said  by  Lord  Ellen- 
borough,  the  holder  cannot  allow  himself  to  remain  "  in  a  state  of 
passive  and  contented  ignorance."  Bateman  v.  Joseph,  2  Campb. 
461.  What  is  reasonable  diligence  will  depend  upon  the  circum- 
stances of  each  case.    What  would  be  sufficient  in  one  case  might 


188  THE   NEGOTIABLE   INSTRUMENTS   LAW. 

fall  short  in  another.  Howland  v.  Adrian,  29  N.  J.  Law,  41.  And 
any  mode  of  inquiry  will  be  sufficient  which  under  the  circum- 
stances of  the  case  evinces  reasonable  diligence.  Hartford  Bank  v. 
Stedman,  3  Conn.  494. 

Raliance  upon  directory. — But  bare  reliance  upon  a  directory 
is  not  sufficient.  Bacon  v.  Hanna,  137  N.  Y.  379,  382.  In  the  case 
last  cited,  the  court  said :  "  Merely  looking  into  a  directory  is  not 
enough.  The  sources  of  error  in  that  process  are  too  many  and  too 
great.  Such  books  are  accurate  enough  in  a  general  way,  and  con- 
venient as  an  aid  or  assistance,  but  they  are  private  ventures,  created 
by  irresponsible  parties,  and  depending  upon  information  gathered 
as  cheaply  as  possible  and  by  unknown  agents.  Their  help  may  be 
invoked,  but,  as  was  said  in  Lawrence  v.  Miller,  16  N.  Y.  235,  their 
error  may  excuse  the  notary,  but  will  not  charge  the  defendant. 
Merely  consulting  them  should  not  be  deemed  '  the  best  informa- 
tion obtainable  by  diligent  inquiry.'  "  Greenwich  Bank  v.  De- 
Groot,  7  Hun,  210;  Baer  v.  Leppert,  12  Hun,  516." 

Duty  to  apply  for  information. — If  the  holder  is  ignorant  of 

the  address  he  should  apply  to  the  other  parties  to  the  instrument 

for  information.  University  Press  v.  Williams,  48  App.  Div. 
(N.  Y.)  190. 

Duty  to  inform  notary— Duty  of  notary  to  inquire.— When  a 

notary  is  employed,  it  is  the  duty  of  the  holder  to  inform  him  of  the 
indorser's  place  of  residence;  and  if  this  be  omitted,  the  notary 
ought  to  apply  to  all  the  parties  to  the  instrument  for  information, 
and  especially  to  the  holder  himself.  Hill  v.  Farrell,  3  Greenleaf, 
233;  Haly  v.  Brown,  5  Pa.  St.  178,  182;  Tate  v.  Sullivan,  30  Md. 
404;  Staylor  v.  Ball  &  Williams,  24  Md.  1S3. 

Agent  for  collection. — But  as  the  duty  to  give  notice,  and  there- 
fore the  duty  of  due  diligence  to  discover  the  residence  of  the  in- 
dorsee arises  subsequently  to  the  dishonor  of  the  note,  it  is  not  an 
element  of  due  diligence  that  the  owner  should  previously  have 
communicated  his  knowledge  of  the  indorser's  residence  to  the  holder 
for  collection.    Bartlett  v.  Isbell,  31  Conn.  297. 

Change  of  residence — Presumption. — Where  it  does  not  appear 
that  the  residence  of  the  indorser  has  been  changed  previously  to 
the  time  of  sending  the  notice,  it  will  be  presumed  that  there  has 


NOTICE   OF   DISHONOR.  ISO 

been  no  change  of  residence  up  to  that  time.  Mohlman  Co.  v.  Mc- 
Kane,  60  App.  Div.  546  (a  case  arising  under  the  statute). 

When  question  of  law. — Where  the  facts  are  undisputed  the 
question  of  due  diligence  in  seeking  to  give  notice  of  dishonor  is 
for  the  court.    Haly  v.  Brown,  5  Pa.  St.  178. 

§  113.  When  delay  in  giving  notice  is  excused. — 
Delay  in  giving  notice  of  dishonor  is  excused  when  the 
delay  is  caused  by  circumstances  beyond  the  control 
of  the  holder,  and  not  imputable  to  his  default,  miscon- 
duct or  negligence.  When  the  cause  of  delay  ceases 
to  operate,  notice  must  be  given  with  reasonable  dili- 
gence. 

Illustration. — For  example,  in  Martin  v.  Ingersoll,  8  Pick.  1, 

the  delay  was  caused  by  the  fact  that  during  the  Christmas  holi- 
days vessels  were  not  allowed  to  clear  from  Havana:  Held,  that 
during  the  continuance  of  the  holidays  it  was  not  necessary  to  write 
a  notice  of  the  dishonor  of  a  bill. 

§  114.  When  notice  need  not  be  given  to  drawer. — 
Notice  of  dishonor  is  not  required  to  be  given  to  the 
drawer  in  either  of  the  following  cases : 

1.  Where  the  drawer  and  drawee  are  the  same  per- 
son; 

2.  Where  the  drawee  is  a  fictitious  person  or  a  per- 
son not  having  capacity  to  contract; 

3.  Where  the  drawer  is  the  person  to  whom  the  in- 
strument is  presented  for  payment; 

4.  Where  the  drawer  has  no  right  to  expect  or  re- 
quire that  the  drawee  or  acceptor  will  honor  the  in- 
strument; 

5.  Where  the  drawer  has  countermanded  payment. 

Where  drawer  and  drawee  are  the  same  person. — See  Roach  v. 
Ostler,  1  Man.  &  Ry.  120;  Planters'  Bank  v.  Evans,  36  Tex.  592; 
Chicago,  etc.,  R.  R.  Co.  v.  West,  37  Ind.  211.  When  the  drawer 
and  the  drawee  are  the  same  in  contemplation  of  law,  the  rule  ap- 
plicable to  such  draft  is,  that  in  legal  operation  it  is  regarded  as  a 


190  THE   NEGOTIABLE  INSTRUMENTS  LAW. 

promissory  note,  payable  on  demand,  and  the  maker  thereof  is  not 
entitled  to  notice.  Bailey  v.  Southwestern  E.  E.  Bank,  11  Fla. 
266.  Notice  is  not  required  to  render  a  firm  liable  where  all  the 
members  of  the  firm  are  members  of  the  house  which  drew  the  bill. 
West  Branch  Bank  v.  Fulner,  3  Pa.  St.  399. 

Right  to  expect  paper  to  be  honored. — Life  Insurance  Company 
v.  Pendleton,  112  U.  S.  708 ;  Wollenweber  v.  Ketterlinn,  17  Pa.  St. 
389.  Although  the  drawer  has  no  funds  in  the  hands  of  the  drawee, 
yet  if  he  has  a  right  to  expect  to  have  funds  there  to  meet  the  bill, 
or  if  he  has  a  right  to  expect  the  bill  to  be  accepted  by  the  drawee 
in  consequence  of  an  agreement  or  an  arrangement  with  him,  or  if 
upon  taking  up  the  bill  he  would  be  entitled  to  sue  the  drawee  or 
any  other  party  to  the  bill,  then  in  every  such  case  he  is  entitled 
to  strict  notice  of  dishonor.    Pitts  v.  Jones,  9  Fla.  519. 

§  115.  When  notice  need  not  be  given  to  indorser.— 

Notice  of  dishonor  is  not  required  to  be  given  to  an 
indorser  in  either  of  the  following  cases: 

1.  Where  the  drawee  is  a  fictitious  person  or  a  per- 
son not  having  capacity  to  contract,  and  the  indorser 
was  aware  of  the  fact  at  the  time  he  indorsed  the  in- 
strument ; 

2.  "Where  the  indorser  is  the  person  to  whom  the  in- 
strument is  presented  for  payment; 

3.  Where  the  instrument  was  made  or  accepted  for 
his  accommodation. 

Where  drawee  is  a  factitious  person. — See  note  to  section  9. 

Where  instrument  is  presented  to  indorser.— For  cases  applying 
the  statute,  see  Electric  Mfg.  Co.  v.  Hodge,  181  Mo.  App.  232;  In 
re  Swift,  106  Fed.  Eep.  65. 

Paper  made  or  accepted  for  indorser' s  accommodation. — See 
French  v.  Bank  of  Columbia,  4  Cranch,  141;  Eoss  v.  Bedell,  5 
Duer,  462 ;  Blenderman  v.  Price,  50  N.  J.  L.  296 ;  Torrey  v.  Frost, 
40  Me.  74.  Where  one,  as  indorser,  procures  the  note  of  another  to 
be  discounted  by  a  bank  for  his  credit,  and  at  the  time  the  discount 
is  effected  makes  a  distinct  promise  to  the  bank  to  pay  the  note  at 
maturity,  his  liability  is  absolute,  not  conditional,  and  protest  and 


NOTICE   OF  DISHONOR.  191 

notice  of  non-payment  are  unnecessary.  Sieger  v.  Second  National 
Bank,  132  Pa.  St.  307.  So,  where  a  number  of  stockholders  indorse 
before  delivery,  a  note  made  for  the  benefit  of  the  corporation,  the 
note  may  be  regarded  as  made  for  their  accommodation,  so  that 
notice  of  dishonor  is  excused  under  that  provision  of  the  Negotiable 
Instruments  Law,  which  dispenses  with  notice  where  the  instrument 
was  made  or  accepted  for  the  indorsers'  accommodation.  Mercan- 
tile Bank  v.  Busby,  120  Tenn.  652.  Defendants  were  respectively 
president  and  secretary  of  a  corporation  and  also  directors  and  large 
stockholders.  The  corporation  had  no  assets  whatever  from  which 
it  could  realize  money,  but  was  engaged  in  the  execution  of  two 
contracts,  which  defendants  regarded  as  valuable.  For  the  purpose 
of  continuing  with  performance  of  the  contracts,  they  borrowed 
money  from  plaintiff's  testator,  giving  a  note  which  they  signed  on 
behalf  of  the  corporation,,  and  which  with  another  director,  they 
also  indorsed  individually.  When  the  note  matured,  the  company 
had  no  money  with  which  to  pay  it,  as  defendants,  its  executive  of- 
ficers knew :  Held,  that  under  this  section,  the  holder  was  not  re- 
quired to  present  the  note  to  the  company  for  payment,  or  to  give 
the  defendants  notice  of  dishonor.  Luckenbach  v.  McDonald,  161 
Fed.  Rep.  296,  95  C.  C.  A.  604. 

§  116.  Where  notice  of  non-acceptance  has  been 
given. — Where  due  notice  of  dishonor  by  non-accept- 
ance has  been  given,  notice  of  a  subsequent  dishonor 
by  non-payment  is  not  necessary,  unless  in  the  mean- 
time the  instrument  has  been  accepted. 

See  De  la  Torre  v.  Barclay,  1  Stark,  308;  Campbell  v.  French, 
6  T.  R  200. 

§  117.  Omission  to  give  notice  of  non-acceptance — 
subsequent  holder. — An  omission  to  give  notice  of  dis- 
honor by  non-acceptance  does  not  prejudice  the  rights 
of  a  holder  in  due  course  subsequent  to  the  omission. 

Variant  readings. — In  Wisconsin  the  following  is  added  at  the 
end  of  the  section:  "  but  this  shall  not  be  construed  to  relieve  any 
liability  discharged  by  such  omission."  This  amendment  is  harm- 
less; but  the  necessity  for  it  would  be  difficult  to  discover. 


192  THE   NEGOTIABLE  INSTRUMENTS   LAW. 

§  118.  Protest  authorized  in  all  cases  of  dishonor — 
when  required. —  Where  any  negotiable  instrument 
has  been  dishonored  it  may  be  protested  for  non-ac- 
ceptance or  non-payment,  as  the  case  may  be;  but  pro- 
test is  not  required,  except  in  the  case  of  foreign  bills 
of  exchange. 

Variant  readings. — In  Vermont  the  following  is  added  at  the 
end  of  the  section :  "but  this  provision  shall  not  be  held  to  dis- 
pense with  demand  and  notice  of  dishonor  as  provided  by  §§71 
and  90." 

Rule  at  common  law.— This  section  makes  no  change  in  the  law. 
See  Bay  v.  Church,  15  Conn.  129 ;  Legg  v.  Vinal,  165  Mass.  555 ; 
Tate  v.  Sullivan,  30  Md.  464;  Weems  v.  Farmers'  Bank,  15  Md. 
231;  Kicketts  v.  Pendleton,  14  Md.  320;  Sumner  v.  Kimball,  2  Wis. 
524;  Stephenson  v.  Dickson,  24  Pa.  St.  148.  Under  this  section  the 
drawer  of  a  foreign  bill  is  discharged  unless  the  bill  be  protested. 
Amsinck  v.  Rogers,  189  N.  Y.  252;  S.  C,  103  App.  Div.  428. 

Certificate  of  notary. — While  protest  is  not  necessary,  except  in 
case  of  foreign  bills,  it  is  very  convenient  in  all  cases,  because  it 
affords  the  easiest  and  most  certain  method  of  proving  the  fact  of 
dishonor  and  the  notice  to  the  indorsers.  The  statutes  of  nearly  all, 
if  not  all,  of  the  states  make  the  certificate  of  the  notary  prima 
facie  evidence  of  these  facts.  Under  the  statute  of  Pennsylvania, 
making  the  certificate  of  a  notary  public  evidence  of  the  facts 
therein  contained,  a  notary's  certificate  that  he  had  protested  a 
note  and  notified  the  endorsers  of  the  presentation,  demand 
and  refusal,  is  prima  facie  evidence  that  notice  was  given  in  com- 
pliance with  the  requirements  of  the  Negotiable  Instruments  Law. 
Scott  v.  Brown,  240  Pa.  St.  328. 

Foreign  bills. — As  to  what  are  foreign  bills,  see  section  129. 
For  other  provisions  relative  to  protest,  see  sections  152-160. 

Protest  of  notes  not  required. — Statute  applied  in  Demelman  v. 
Brazier,  198  Mass.  458;  Sherman  v.  Ecker,  59  Misc.  (N.  Y.)  216; 
McBride  v.  Illinois  Nat.  Bank,  138  App.  Div.  (N.  Y.)  346. 


DISCHARGE  OF   NEGOTIABLE   INSTRUMENTS.  193 


ARTICLE  IX. 

Discharge  of  Negotiable  Instruments. 

Section  119.  How  instrument  discharged. 

120.  When  person  secondarily  liable  is  dis- 

charged. 

121.  Payment  by  person  secondarily  liable — 

effect  of. 

122.  Renunciation  by  holder. 

123.  Unintentional  cancellation. 

124.  Alteration  of  instrument — effect  of. 

125.  What  constitutes  a  material  alteration. 

§  119.  How  instrument  discharged. — A  negotiable 
instrument  is  discharged: 

1.  By  payment  in  due  course  by  or  on  behalf  of  the 
principal  debtor; 

2.  By  payment  in  due  course  by  the  party  accommo- 
dated, where  the  instrument  is  made  or  accepted  for 
accommodation ; 

■  3.  By  the  intentional  cancellation  thereof  by  the 
holder; 

4.  By  any  other  act  which  will  discharge  a  simple 
contract  for  the  payment  of  money; 

5.  When  the  principal  debtor  becomes  the  holder  of 
the  instrument  at  or  after  maturity  in  his  own  right. 

Variant  readings. — In  Illinois  subdivision  four  is  omitted. 

Stamping  paper  "paid." — The  mere  fact  that  the  payee  stamps 
the  word  "  paid "  upon  the  paper  does  not  constitute  payment. 
Hanna  v.  McCrory,  141  Pac.  Rep.  (K  Hex.)  996. 

13 


194  THE   NEGOTIABLE  INSTRUMENTS  LAW. 

Forged  paper. — As  to  the  effect  of  payment  made  by  a  drawee- 
where  the  drawer's  signature  is  forged,  see  note  to  section  62. 

Payment  by  stranger. — When  one  who  is  not  a  party  to  the- 
paper  pays  his  money  for  it,  and  "  takes  it  up,"  the  presumption  is 
that  he  has  bought  it,  and  not  paid  it  off.  Cantrell  v.  Davidson, 
180  Mo.  App.  410. 

Possession  as  evidence  of  payment. — The  possession  of  a  bill 
of  exchange  by  the  acceptor  after  it  has  been  in  circulation  is  prima 
facie  evidence  that  it  has  been  paid  by  him.  Baring  v.  Clark,  19 
Pick.  220.  So  the  possession  of  a  promissory  note  by  the  maker. 
First  Nat.  Bank  v.  Harris,  7  Wash.  139;  Perez  v.  Bank  of  Key 
West,  36  Fla.  467.  But  see  Miller  v.  Kreiter,  76  Pa.  St.  75;  Eckert 
v.  Cameron,  7  Wright,  120;  Korkemas  v.  Macksoud,  131  App.  Div. 
(N.  Y.)  728. 

Where  renewal  note  is  a  forgery. — The  surrender  of  a  genuine 
note  of  a  town  in  exchange  for  an  instrument  purporting  to  be  a 
renewal  note  forged  by  the  treasurer  of  the  town  does  not  extinguish 
the  surrendered  note,  which,  although  not  to  be  found,  can  be 
sued  upon  by  the  holder.  Bass  v.  Inhabitants  of  Wellesley,  192 
Mass.  526. 

Burden  of  proof. — Where  the  defendant  admits  the  execution 
of  a  note,  the  burden  of  showing  payment  is  on  him.  Guano  Com- 
pany v.  Marks,  135  N.  C.  59;  Swan  v.  Carawan,  168  N.  C.  472. 

Payment  by  indorser. — A  payment  made  to  the  holder  of  a 
promissory  note  by  an  indorser,  not  as  agent  for  the  maker,  but 
simply  in  discharge  of  his  obligation  as  indorser,  where  the  note  was 
executed  by  the  maker  for  value,  does  not  enure  to  the  benefit  of 
the  latter,  and  in  an  action  upon  the  note  he  is  liable  for  the  whole 
amount  thereof,  notwithstanding  the  payment.  Madison  Square 
Bank  v.  Pierce,  137  N.  Y.  444.  In  the  case  cited  it  was  said :  "  To 
the  extent  of  the  money  paid,  the  indorser  becomes  equitably  en- 
titled to  be  substituted  to  the  rights  and  remedies  of  the  holder,  and 
becomes,  pro  tanto,  the  beneficial  owner  of  the  debt;  so  that  the 
maker's  obligation  to  pay  the  note  in  full,  at  first  due  the  holder 
solely  in  his  own  right,  becomes,  after  the  part  payment  by  the  in- 
dorser, still  wholly  due  to  the  holder,  but  partly  in  his  own  right  and 
partly  as  trustee  for  the  indorser.  A  court  of  law  cannot  split  the 
note  into  parts,  and  must  act  upon  the  legal  interest  and  owner- 


DISCHARGE  OF   NEGOTIABLE  INSTRUMENTS.  195 

ship."    For  cases  where  payment  made  by  person  secondarily  liable, 
see  section  121. 

Accommodation  paper. — Where  a  note  is  made  for  the  accom- 
modation of  one  of  the  makers,  and  is  paid  by  him,  it  is  dis- 
charged as  to  the  other  makers.  Comstock  v.  Buckley,  141  Wis. 
228. 

Cancellation  by  holder. — Under  this  section,  when  the  payee  of 
a  note  tears  it  up,  with  the  intention  of  destroying  and  cancelling 
it,  this  is  a  discharge  of  the  note.  Montgomery  v.  Schwald,  177 
Mo.  App.  75. 

Release  of  a  joint  party. — Thus,  under  subdivision  four,  the  re- 
lease of  one  joint  maker  will  operate  to  discharge  the  others.  Case 
v.  Bridger,  133  La.  754.  See  also  Crawford  v.  Roberts,  8  Oreg. 
324.  But  to  have  this  effect,  the  release  must  be  under  seal.  Shaw 
v.  Pratt,  22  Pick.  305. 

Meaning  of  term  in  his  own  right. — The  words  "  in  his  own 
right  "  in  subdivision  five,  merely  exclude  such  a  case  as  that  of 
a  maker  acquiring  the  instrument  in  a  purely  representative  ca- 
pacity. Schwartzman  v.  Post,  94  App.  Div.  (N.  Y.)  474.  If  he 
should  become  the  holder  in  a  representative  capacity,  for  ex- 
ample, as  executor,  the  instrument  would  not  be  discharged.  Nash 
v.  DeFreville  (1900),  2  Q.  B.  72.  And  where  the  paper  has  been 
taken  up  by  an  indorser,  the  mere  fact  that  it  has  come  into 
the  possession  of  the  maker  in  some  unexplained  way  does  not 
operate  as  a  discharge.  Korkemas  v.  Macksoud,  131  App.  Div. 
(N.  Y.)  728.  Nor  is  it  discharged  when  the  maker  acquired  the 
paper  as  agent  for  another.  Peoples  State  Bank  v.  Dryden,  91 
Kans.  216. 

Evidence. — This  section  points  out  and  designates  the  acts 
which  discharge  the  contract,  but  it  does  not  prescribe  the  char- 
acter of  proof  by  which  those  acts  are  to  be  established.  Whit- 
comb  v.  Nat.  Exchange  Bank,  123  Md.  613. 

Payment  through  clearing-house. — On  this  subject,  see  Columbia- 
Knickerbocker  Trust  Co.  v.  Miller,  215  N.  Y.  191. 

§  120.  When  person  secondarily  liable  is  discharged. 

— A  person  secondarily  liable  on  the  instrument  is  dis- 
charged : 


19G  THE   NEGOTIABLE   INSTRUMENTS   LAW. 

1.  By  any  act  which  discharges  the  instrument; 

2.  By  the  intentional  cancellation  of  his  signature 
.by  the  holder; 

3.  By  the  discharge  of  a  prior  party; 

4.  By  a  valid  tender  of  payment  made  by  a  prior 
party; 

5.  By  a  release  of  the  principal  debtor,  unless  the 
holder's  right  of  recourse  against  the  party  secondarily 
liable  is  expressly  reserved; 

6.  By  any  agreement  binding  upon  the  holder  to 
extend  the  time  of  payment  or  to  postpone  the  holder's 
right  to  enforce  the  instrument,  unless  made  with  the 
assent  of  the  party  secondarily  liable,  or  unless  the 
right  of  recourse  against  such  party  is  expressly  re- 
served. 

Variant  readings. — In  all  states  except  New  York  and  Mary- 
land, the  words  "unless  made  with  the  assent  of  the  party  secon- 
darily liable,  or"  appear  after  the  word  "instrument"  in  subdivi- 
sion six.  The  omission  appears  to  have  been  merely  an  error  in 
engrossing.  In  Illinois  the  following  changes  are  made:  Subdivi- 
sion three  is  omitted;  at  the  end  of  subdivision  five  the  following 
is  added:  "or  unless  the  principal  debtor  be  an  accommodating 
party;"  and  subdivision  six  reads:  "By  an  agreement  in  favor 
of  the  principal  debtor  binding  upon  the  holder  to  extend  the 
time  of  payment,  or  to  postpone  the  holder's  right  to  enforce  the 
instrument,  unless  made  with  the  assent  prior  or  subsequent  of 
the  party  secondarily  liable  or  unless  the  right  of  recourse  against 
such  party  is  expressly  reserved,  or  unless  the  principal  debtor  be 
an  accommodating  party."  In  Missouri  the  words  "except  when 
such  discharge  is  had  in  bankruptcy  proceedings,"  are  added  at 
the  of  subdivision  three.  In  Wisconsin  the  words  "or  unless  he 
is  fully  indemnified"  are  added  at  the  end  of  the  section;  and  a 
new  subdivision,  numbered  4a,  is  interpolated,  as  follows:  "By 
o-ivino-  up  or  applying  to  other  purposes  collateral  security  ap- 
plicable to  the  debt,  or,  there  being  in  the  holder's  hands  or  within 
his  control  the  means  of  complete  or  partial  satisfaction,  the  same 
are  applied  to  other  purposes." 

Discharge  of  prior  party. — It  is  a  general  rule  that  whatever 
discharges  the  maker  or  acceptor  discharges  the  drawer  and  in- 


DISCHARGE   OF   NEGOTIABLE   INSTRUMENTS.  197 

dorser,  who  are  sureties,  for  the  contract  which  they  undertook 
to" "assume  thus  passes  out  of  existence  by  the  act  of  the  benefi- 
ciary. And  whatever  discharges  a  prior  indorser  discharges  all 
subsequent  indorsers,  for  the  reason  that  he  stood  between  them 
and  the  holder,  and  on  making  payment  each  one  could  have  had 
recourse  against  him,  but  from  which  his  discharge  precludes 
them.  The  contracts  of  the  parties  are  said  to  be  like  the  links 
of  a  pendant  chain;  if  the  holder  dissolves  the  first,  every  link 
falls  with  it.  Shutts  v.  Fingar,  100  N.  Y.  539 ;  Spies  v.  Nat.  City 
Bank,  174  N.  Y.  222;  Couch  v.  Waring,  9  Conn.  261;  Gennis  v. 
YVcighley,  114  Pa.  St.  194.  But  this  rule,  of  course,  does  not 
apply  where  a  prior  party  has  been  discharged  by  the  laches  of 
the  intermediate  indorser;  for  the  holder  need  give  notice  only 
to  his  immediate  indorser.  West  River  Bank  v.  Taylor,  34  N.  Y. 
128,  131.  And  after  the  responsibility  of  an  indorser  has  been 
fixed  no  act  or  dealing  of  the  holder  with  the  maker  will  discharge 
the  indorser,  except  it  be  such  an  act  as  will  defeat,  impair  or 
delay  the  right  of  the  indorser,  on  paying  the  note,  to  recover 
against  the  maker.  Farmers'  Bank  v.  Sprigg,  11  Md.  390.  Where 
the  holder  of  a  note,  with  several  indorsers  in  blank,  sues  the 
maker  and  writes  over  the  name  of  the  first  indorser  an  order 
to  pay  to  himself,  the  holder,  but  without  striking  out  the  names 
of  the  subsequent  indorsers,  he  does  not  thereby  discharge  them, 
and  therefore  one  of  them  who  pays  the  amount  of  the  note  to 
the  holder  may  sue  any  of  the  prior  parties.  Cole  v.  Cushing, 
8  Pick.  48.  An  indorser  is  discharged  where  the  holder  has  al- 
lowed the  statute  of  limitations  to  run  against  the  maker.  Shutts 
v.  Fingar,  100  N.  Y.  539. 

Tender  of  payment  by  prior  party. — See  Spurgeon  v.  Smiths,  114 
Ind.  453. 

Security  given  by  prior  party. — The  giving  of  a  judgment  or 
other  security  by  the  maker  or  a  prior  indorser  does  not  discharge 
a  subsequent  indorser.  First  Nat.  Bank  v.  Peltz,  176  Pa.  St. 
513;  Guarantee  Co.  v.  Craig,  155  Pa.  St.  343. 

Release  of  principal  debtor. — By  an  express  reservation  of  the 
holder's  rights  against  the  drawer  or  indorsers,  their  rights 
against  the  maker  or  acceptor  are-  reserved  by  implication.  Glou- 
cester Bank  v.  Worcester,  10  Pick.  528;  Tombeckbe  Bank  v.  Strat- 
ton,  7  Wend.  429 ;  Stewart  v.  Eden,  2  Cai.  121 ;  Second  Nat.  Bank 
v.  Graham,  246  Pa.  St.  256. 


198  THE   NEGOTIABLE  INSTRUMENTS  LAW. 

Where  extension  requested  by  indorser. — Subdivision  five  refers 
to  the  unconditional  discharge  of  the  principal  debtor,  and  has  no 
application  where  the  release  is  given  by  the  holder  at  the  request 
of  the  party  secondarily  liable.  Arlington  Nat.  Bank  v.  Bennett, 
214  Mass.  352.  And  oral  evidence  is  admissible  to  prove  that  an 
unequivocal  sealed  instrument,  which  contains  no  reservation  of  a 
right  of  recourse  against  the  indorser,  was  executed  and  delivered 
at  the  request  of  the  indorser,  and  upon  his  promise  to  remain 
responsible.    Id. 

Necessity  for  express  reservation  of  right  of  recourse. — As  the 
statute  requires  the  right  of  recourse  against  the  party  secondarily 
liable  to  be  "expressly  reserved"  the  reservation  of  such  right 
cannot  be  implied  from  the  acts  and  conduct  of  the  parties. 
Phenix  National  Bank  v.  Hanlon,  183  Mo.  App.  243. 

Extending  time  of  payment — Reason  for  the  rule. — The  rule  has 
long  been  recognized  that  an  indorser  or  surety  is  entitled  to  have 
the  engagement  of  the  principal  debtor  preserved  without  varia- 
tion in  its  terms,  and  that  his  assent  to  any  change  therein  is 
essential  to  the  continuance  of  his  obligation.  The  reason  of  the 
rule  is  that  his  right  must  not  be  affected  upon  the  maturity  of 
the  indebtednes  to  make  payment  and,  by  subrogation  to  the  cred- 
itor's place,  to  at  once  proceed  against  the  principal  debtor  to 
enforce  repayment.  Therefore  it  is  that  any  agreement  of  the 
creditor,  which  operates  to  extend  the  time  of  payment  of  the 
original  debt  and  supends  the  right  to  immediate  action,  is  held 
to  discharge  the  non-assenting  indorser,  or  surety;  for  the  law  will 
presume  injury  to  him  thereby.  The  creditor  may  arrange  with 
his  debtor  in  any  way  which  does  not  result  in  effecting  either  of 
these  results.  He  may  take,  as  collateral  to  the  old  note,  new 
security,  or  other  notes,  and,  if  time  is  not  given  to  the  debtor, 
the  indorser,  or  surety,  will  not  be  discharged.  To  prevent  such  a 
result,  the  agreement  must  expressly  reserve  all  the  remedies  of 
the  creditor  against  the  indorser,  or  surety;  in  which  case  the 
latter  will  be  in  a  position  to  pay  immediately,  and  then  to  pro- 
ceed against  the  principal  debtor.  Nat.  Park  Bank  v.  Koehler, 
204  N.  Y.  174,  179-180;  Riehl  v.  Austin,  155  App.  Div.  (N.  Y.) 
207. 

What  extension  will'  operate  as  a  discharge. — Any  extension, 
no  matter  how  short,  by  a  valid  agreement,  will  discharge  the  in- 


DISCHARGE  OF  NEGOTIABLE  INSTRUMENTS.  199 

-dorser  or  surety.  Cary  v.  White,  52  N.  Y.  138;  Nightingale  v. 
Meginnis,  34  N.  J.  Law,  461;  Siebeneck  v.  Anchor  Savings  Bank, 
111  Pa.  St.  187;  In  re  Bishop's  Estate,  195  Pa.  St.  85;  Frieden- 
berg  v.  Robinson,  14  Fla.  130.  But  there  must  be  an  enforceable 
agreement  to  this  effect,  either  expressed  or  implied.  Ordinarily 
the  taking  of  a  new  note  from  the  debtor,  payable  at  a  future 
day,  suspends  the  right  of  action  upon  the  original  demand  until 
the  maturity  of  the  new  note,  and-  hence  discharges  a  non-assent- 
ing surety.  Union  Trust  Co.  v.  McCrum,  145  App.  Div.  (N.  Y.) 
409;  Hubbard  v.  Gurney,  64  N.  Y.  450;  Place  v.  Mcllvain,  38 
N.  Y.  960;  Fridenberg  v.  Robinson,  14  Fla.  130.  But  when  the 
new  security  is  payable  on  demand  no  presumption  of  an  agree- 
ment arises.  Board  of  Education  v.  Fonda,  77  N.  Y.  350,  362. 
And  where  new  security  is  taken  merely  as  collateral,  the  fact 
that  the  collateral  may  not  be  enforceable  until  a  definite  time 
in  the  future  does  not  operate  to  extend  the  time  of  payment 
of  the  principal  debt,  or  suspend  the  right  to  sue  on  the  original 
security.  Falkill  National  Bank  v.  Sleight,  1  App.  Div.  (N.  Y.) 
189,  191;  United  States  v.  Hodge,  6  How.  (U.  S.)  279.  Mere 
indulgence  to  the  maker  or  acceptor  will  not  discharge  a  drawer 
or  indorser;  there  must  be  an  agreement  to  extend  the  time  of 
payment  binding  upon  the  holder.  Smith  v.  Erwin,  77  N.  Y.  466; 
Bank  of  Utica  v.  Ives,  17  Wend.  501;  Crawford  v.  Millspaugh, 
13  Johns.  87;  Lockwood  v.  Crawford,  18  Conn.  376;  Friedenberg 
v.  Robinson,  14  Fla.  130.  And  for  this  purpose  the  contract  must 
be  supported  by  a  valid  consideration.  Cary  v.  White,  52  N.  Y. 
138.  A  part  payment  by  the  maker  is  not  such  a  consideration, 
Halliday  v.  Hart,  30  N.  Y.  474;  nor  is  an  agreement  to  pay  inter- 
est, since  it  is  merely  a  promise  to  do  what  the  party  is  already 
bound  to  do.  Wilson  v.  Powers,  130  Mass.  127;  Stuber  v.  Schack, 
83  111.  192. 

Extending  time  to  plead. — An  indorser  is  not  discharged  by  ex- 
tending the  maker's  time  to  answer.  German- Am.  Bank  v.  Nia- 
gara Cycle  Co.,  13  App.  Div.  (N.  Y.)  450. 

Where  right  of  recourse  is  reserved. — Under  subdivision  six  of 
this  section,  a  surety  on  a  note  is  not  discharged  by  the  taking 
of  a  renewal  note  where  the  extension  is  given  with  an  express 
reservation  of  the  right  of  recourse  against  the  surety.  Dier  v. 
Bank  129  Tenn.  89.  But  though  renewal  notes  are  taken  under 
an  express   agreement   between  the   maker  and  holder  that  the 


200  THE   NEGOTIABLE  INSTRUMENTS  LAW. 

indorser  shall  not  be  discharged,  yet  if  subsequent  renewals  are 
made  without  such  an  agreement,  the  indorsers  are  discharged. 
In  re  Moritz  Estate,  239  Pa.  St.  375. 

Same  subject — Reason  for  the  rule. — Inasmuch  as  the  reserva- 
tion of  rights  against  the  surety  becomes  a  consideration  of  the 
contract  for  extension  entered  into  with  the  debtor,  the  latter 
impliedly  agrees  that  the  surety  may  have  all  his  original  rights 
preserved  against  him  as  principal  debtor;  and  while  the  creditor 
cannot  bring  suit  against  the  principal  pending  the  extension, 
the  surety,  if  he  pays  the  debt,  may  sue  the  principal  at  once 
therefor.  The  surety's  contract  is  not  changed,  and  there  is  no 
equitable  reason  to  justify  his  discharge.  Meredith  v.  Dibrell,  127 
Tenn.  287.  For  the  rule  at  common  law,  which  is  the  same  as 
that  under  the  statute,  see  Wagman  v.  Hoag,  14  Barb.  233,  239; 
Rockville  National  Bank  v.  Holt,  58  Conn.  526;  Commercial  Nat. 
Bank  v.  Simpson,  90  N.  C.  469;  Minir  v.  Crawford,  L.  R.  2  Scotch 
Appeals,  456;  Kenworthy  v.  Sawyer,  125  Mass.  28;  Morse  v. 
Huntington,  40  Vt.  488;  Hagey  v.  Hill,  75  Pa.  St.  108. 

Burden  of  proof. — The  burden  of  showing  that  the  indorser 
assented  to  the  extension  of  time  is  on  the  party  seeking  to  charge 
him.     Siebeneck  v.  Anchor  Savings  Bank,  111  Pa.  St.  187. 

Accommodation  maker. — In  the  previous  editions  of  this  work, 
the  author  expressed  the  opinion  that,  under  the  statute,  an  ac- 
commodation maker  will  not  be  discharged  by  an  extension  of 
time  granted  to  the  indorser,  for  the  reason  that  a  maker,  even 
for  accommodation,  is,  by  virtue  of  section  192,  primarily  liable 
upon  the  instrument.  And  this  view  has  been  adopted  by  the 
courts  of  Maryland,  Missouri,  Kentucky,  Oregon,  Washington, 
Utah,  North  Dakota  and  Arizona.  Vanderford  v.  Farmers'  &  Me- 
chanics' Nat.  Bank,  105  Md.  164;  First  State  Bank  v.  Williams, 
164  Ky.  143;  Lane  v.  Hydes,  163  Mo.  App.  688;  Night  &  Day  Bank 
v.  Rosenbaum,  177  S.  W.  Rep.  (Mo.  App.)  693;  Hunter  v.  Harris, 
56  Wash.  628;  Wolstenholme  v.  Smith,  34  Utah,  300;  First  Nat. 
Bank  v.  Meyer,  152  N.  W.  Rep.  (N.  D.)  657;  Cowan  v.  Ramsay, 
35  Ariz.  533.  A  similar  view  Avas  taken  in  New  York  bv  the  Ap- 
pellate Division,  First  Department,  in  National  Citizens'  Bank  v. 
Toplitz  (81  App.  Div.  593),  which,  however,  was  affirmed  in  the 
Court  of  Appeals  on  other  grounds  (178  N.  Y.  466).  See  also 
Delaware  County  Trust  Co.  v.  Title  Ins.  Co.,  199  Pa.  St.  17. 


DISCHARGE  OF  NEGOTIABLE  INSTRUMENTS.  201 

Same  subject — Reason  for  the  change. — The  reason  for  the 
change  mentioned  above  will  be  apparent.  The  rule  which  re- 
quired the  holder  to  treat  an  accommodation  maker  as  a  mere 
surety  was  often  a  trap  for  the  unwary;  for  where  an  indorser  ap- 
plies for  an  extension,  it  will  not  always  occur  to  the  holder,  even 
when  he  is  a  business  man  of  intelligence  and  experience,  that  the 
consent  of  the  maker  is  required.  Nor  does  the  rule  adopted  in 
the  statute  do  any  injustice  to  the  maker.  When  a  man  signs  a 
note  as  the  principal  obligor,  he  cannot  complain  if  he  is  treated 
as  being  in  fact  what  he  appears  to  be  upon  the  face  of  the  pa- 
per. If  he  wishes  to  be  dealt  with  as  a  surety,  he  should  sign  as 
indorser  or  guarantor,  so  as  to  indicate  that  that  is  the  obligation 
he  meant  to  assume.  Indeed,  the  rule  that  an  extension  of  time 
granted  to  the  principal  discharges  the  surety,  without  proof  of 
any  loss  or  injury  to  him,  is  based  upon  considerations  that  are 
theoretical,  rather  than  practical;  and  when  this  rule  is  applied  in 
favor  of  one  who,  upon  the  face  of  a  negotiable  instrument,  has 
assumed  a  primary  liability,  gross  injustice  is  likely  to  result. 

Surrendering  collateral — Wisconsin  statute. — Under  the  provi- 
sions of  the  Wisconsin  act,  that  "a  person  secondairly  liable  on 
the  instrument  is  discharged  *  *  *  by  giving  up  or  applying 
to  other  purposes  collateral  security  applicable  to  the  debt,"  the 
surety  is  discharged  only  to  an  extent  corresponding  with  the 
value  of  the  security  given  up  or  applied  to  other  purposes.  State 
Bank  of  La  Crosse  v.  Michel,  152  Wis.  88.  This  provision  does 
not  appear  in  the  law  as  enacted  in  the  other  states.  As  m  the 
case  of  some  other  local  amendments,  it  seems  to  have  been  ill- 
considered  and  inaccurately  expressed. 

§  121.  Payment  by  party  secondarily  liable  —  effect 
of. — Where  the  instrument  is  paid  by  a  party  secon- 
darily liable  thereon,  it  is  not  discharge ;  but  the  party 
so  paying  it  is  remitted  to  his  former  rights  as  regards 
all  prior  parties,  and  he  may  strike  out  his  own  and 
all  subsequent  indorsements,  and  again  negotiate  the 
instrument,  except: 

1.  Where  it  is  payable  to  the  order  of  a  third  person, 
and  has  been  paid  by  the  drawer;  and 


202  THE  NEGOTIABLE  INSTRUMENTS  LAW. 

2.  Where  it  was  made  or  accepted  for  accommoda- 
tion, and  lias  been  paid  by  the  party  accommodated. 

Situation  of  indorser  who  has  taken  up  the  paper. — Where  an 
indorser  takes  up  the  instrument,  after  it  has  been  dishonored, 
by  paying  the  amount  of  it  to  the  holder,  the  transaction  is  in 
effect  a  repurchase  of  the  paper,  and  not  a  payment  of  it,  and 
the  indorser  becomes  vested  again  with  all  the  rights  which  he 
formerly  had  against  prior  parties.  Assets  Realization  Co.  v. 
Mercantile  Nat.  Bank,  167  App.  Div.  (N.  Y.)  757;  French  v.  Jar- 
vis,  29  Conn.  347.  And  the  paper  retains  its  negotiable  charac- 
ter. Gould  v.  Eager,  17  Mass.  615;  Davis  v.  Miller,  14  Gratt.  1. 
And  although  in  the  case  of  accommodation  paper,  the  indorsee 
may  not  pay  actual  value  at  the  time  of  his  indorsement,  yet  if 
he  pays  the  instrument,  and  gets  possession  of  it,  he  is  deemed  a 
holder.     Reinhart  v.  Schall,  69  Md.  352. 

Where  party  paying  would  have  no  cause  of  action. — The  ap- 
plication of  this  section  is  necessarily  limited  to  cases  where  the 
person  secondarily  liable  can  trace  his  title  through  the  prior 
parties  to  the  party  whom  he  seeks  to  hold.  If,  when  remitted  to 
his  former  rights,  he  would  have  no  cause  of  action  against  any 
party  to  the  paper,  payment  by  him  discharges  the  instrument. 
Quimby  v.  Varnum,  190  Mass.  211. 

Payment  by  second  indorser. — Where  payment  is  made  by  the 
second  indorser,  the  case  is  within  the  provisions  of  this  section. 
Twelfth  Ward  Bank  v.  Brooks,  63  App.  Div.  (N.  Y.)  220. 

Possession  of  paper  as  evidence. — Possession  of  the  paper  by  an 
indorser,  after  its  protest  for  non-payment,  is  prima  facie  evi- 
dence that  he  has  performed  his  contract  of  indorsement,  and  has 
paid  to  the  holder  the  amount  due.  Hill  v.  Buchanan,  71  N.  J.  L. 
301.     See  section  119. 

Striking  out  indorsements. — It  is  necessary  to  strike  out  all 
subsequent  indorsements;  for  after  the  paper  has  once  been  paid 
it  cannot  be  negotiated  again  if  such  negotiation  would  make  any 
of  the  parties  liable  who  would  otherwise  be  discharged.  Goodner 
v.  Maynard,  7  Allen,  456;  Citizens'  Bank  v.  Say,  80  Va.  436.  And 
by  putting  the  note  in  circulation  again  the  liability  of  subsequent 
parties  is  not  revived.     Davis  v.  Miller,  14  Gratt.  1. 


DISCHARGE  OF  NEGOTIABLE  INSTRUMENTS.  203 

Payment  by  drawee. — Payment  by  a  bank  of  a  check  drawn 
tipon  it,  in  the  usual  course,  and  in  the  absence  of  fraud,  or  mis- 
take of  fact,  extinguishes  the  instrument,  and  the  bank  by  there- 
after putting  it  in  circulation  cannot  create  a  liability  thereunder 
against  the  maker  or  prior  indorser.  Aurora  State  Bank  v.  Hayes- 
Eames  Elevator  Co.,  88  Neb.  187. 

Right  of  set-off. — This  section  does  not  preclude  an  indorser  of 
a  note  who  has  paid  the  same  upon  the  insolvency  of  the  maker 
from  claiming  a  set-off  against  one  to  whom  the  maker  had  as- 
signed a  debt  due  from  the  indorser.  Nolan  Bros.  Lumber  Co.  v. 
Dudley  Lumber  Co.,  128  Tenn.  11. 

Who  entitled  to  again  negotiate  paper. — The  words  "remitted 
to  his  former  rights,"  as  used  in  this  section,  apply  only  to  a 
party  secondarily  liable  who  has  himself  been  connected  with  the 
title  to  the  instrument.  Lill  v.  Gleason,  92  Kas.  254.  See  also 
Miller  v.  Del  Rio  Mining  Co.,  25  Idaho,  83. 

Note  in  hands  of  maker. — A  note  coming  into  the  hands  of  the 
maker  under  such  circumstances  as  to  raise  a  presumption  of  its ' 
payment  cannot  be  pledged  by  him  as  collateral  so  as  to  bind  a 
surety,  although  the  note  may  not  have  matured  at  the  time  of 
its  reissue.    First  National  Bank  v.  Harris,  7  Wash.  139. 

Accommodation  paper. — Where  the  instrument  is  paid  by  an 
accommodation  acceptor  it  is  discharged,  and  becomes  commercially 
dead,  but  is  evidence  in  the  hands  of  the  payer  to  charge  the  real 
debtor.    Cottrell  v.  Watkins,  89  Va.  801 ;  First  Nat.  Bank  v.  Max- 
field,  83  Me.  576.     So,  where  one  of  several  accommodation  mak- 
ers pays  the  note,  it  remains  in  his  hands  evidence  of  his  right  to 
contribution  from  his  co-sureties.     This  right  may  be  assigned  by 
him,  and  the  delivery  of  the  note  by  him  to  a  third  person  for  a 
valuable   consideration   raises   a  presumption  of  an   intention   to 
pass  this  right  to  the  transferee.    Dillenbeck  v.  Bygert,  97  N.  Y. 
303.     Where  an  accommodation  indorser  for  the  payee  has  paid 
the  note  he  may  recover  the  amount  of  an  accommodation  maker. 
Laubach  v.  Pursell,  35  N.  J.  Law,  434.    And  where  a  second  indor- 
ser of  a  note  has  paid  and  taken  it  up  he  becomes  a  holder  for 
value,  and  may  maintain  an  action  to  recover  the  amount  thereof 
of  the  first  indorser,  although  both  are  accommodation  indorsers. 
Kelly  v.  Burroughs,  102  N.  Y.  93.     See  also  Kaschner  v.  Conklin, 
40  Conn.  81.     But  where  the  instrument  was  made  for  the  accom- 


'204:  THE   NEGOTIABLE  INSTRUMENTS  LAW. 

modation  of  the  indorser,  payment  by  him  discharges  it.     Joseph- 
son  v.  Gens,  85  Misc.  (N.  Y.)  372.     See  section  68. 

§  122.  Renunciation  by  holder. — The  holder  may 
expressly  renounce  his  rights  against  any  party  to  the 
instrument,  before,  at  or  after  its  maturity.  An  abso- 
lute and  unconditional  renunciation  of  his  rights 
against  the  principal  debtor  made  at  or  after  the  ma- 
turity of  the  instrument  discharges  the  instrument. 
But  a  renunciation  does  not  affect  the  rights  of  a  holder 
in  due  course  without  notice.  A  renunciation  must  be 
in  writing,  unless  the  instrument  is  delivered  up  to  the 
person  primarily  liable  thereon. 

Parties  primarily  and  secondarily  liable. — In  Leask  v.  Dew,  102 
App.  Div.  (N.  Y.)  529,  534,  it  was  said  by  Hatch,  J.:  "There  is 
some  obscurity  in  the  provisions  of  our  statute.  In  its  first  sentence 
it  provides  for  the  renunciation  of  the  rights  of  the  holder  against 
any  party  to  the  instrument  which  may  be  made  before,  at  or  after 
its  maturity.  In  the  second  sentence  it  provides  for  an  absolute  and 
unconditional  renunciation  of  the  rights  of  the  holder  against  the 
principal  debtor  at  or  after  the  maturity  of  the  instrument,  which 
discharges  the  instrument.  The  first  relates  to  the  party;  the  sec- 
ond to  the  instrument.  It  is  somewhat  difficult  to  see  how  there 
could  be  an  absolute  discharge  of  a  party  to  an  instrument  with- 
out discharging  the  instrument  as  an  obligation  so  far  as  he  is  con- 
cerned. We  do  not  clearly  perceive  why  this  distinction  should 
have  been  made."  But  upon  reflection,  it  will  be  seen  that  the  dis- 
tinction is  indispensable.  If  the  party  in  whose  favor  the  renuncia- 
tion is  made  is  only  secondarily  liable,  then  only  he  and  parties  sub- 
sequent to  him  are  discharged,  and  the  instrument  still  remains  in 
force  as  to  prior  parties.  See  section  120,  subdivision  3.  But  when 
the  holder  renounces  his  rights  against  the  person  primarily  liable, 
then  the  instrument  itself  is  discharged.  The  learned  judge  writing 
as  above-mentioned  evidently  had  in  mind  the  facts  of  the  case  be- 
fore the  court,  where  the  maker  was  the  only  party  to  the  paper,  and 
he  thus  failed  to  note  the  situation  which  will  arise  where  there  are 
a  number  of  indorsers.  Thus,  if  a  bill  drawn  by  A  and  accepted 
by  B,  should  be  indorsed  by  C  and  D,  a  renunciation  in  favor  of  D 


DISCHARGE  OF   NEGOTIABLE   INSTRUMENTS.  205 

would  discharge  him  only,  and  a  renunciation  in  favor  of  C  would 
discharge  only  C  and  D;  but  a  renunciation  in  favor  of  B,  the  ac- 
ceptor, would  discharge  the  instrument. 

Necessity  for  writing. — Unless  the  instrument  be  delivered  up 
the  renunciation  can  be  proved  only  by  the  holder's  written  declara- 
tion. Whitcomb  v.  Nat.  Exchange  Bank,  123  Md.  612 ;  Baldwin  v. 
Daly,  41  Wash.  416.  After  a  testator's  death,  there  was  found 
among  his  papers,  inclosed  in  an  envelope,  a  promissory  note  pay- 
able to  him  and  an  instrument  signed  by  him  and  addressed  to  his 
executors  stating,  "  Gentlemen :  The  enclosed  note  I  wish  to  be 
cancelled  in  case  of  my  death,  and  if  the  law  does  not  allow  it,  I 
wish  you  to  notify  my  heirs  that  it  is  my  wish  and  orders :"  Held, 
that  this  was  not  a  renunciation  within  the  statute.  Leask  v.  Dew, 
102  App.  Div.  (N.  Y.)  529. 

Consideration. — The  term  "renunciation"  as  used  in  this  sec- 
tion describes  the  act  of  surrendering  a  right  of  claim  without 
recompense,  but  it  can  be  applied  with  equal  propriety  to  the  re- 
linquishment of  a  demand  upon  an  agreement  supported  by  a  con- 
sideration.   Whitcomb  v.  Nat.  Exchange  Bank,  123  Md.  612. 

§  123.  Unintentional  cancellation — burden  of  proof. 
— A  cancellation  made  unintentionally,  or  under  a  mis- 
take, or  without  authority  of  the  holder,  is  inopera- 
tive ;  but  where  an  instrument  or  any  signature  thereon 
appears  to  have  been  canceled  the  burden  of  proof  lies 
on  the  party  who  alleges  that  the  cancellation  was 
made  unintentionally,  or  under  a  mistake  or  without 
authority. 

Burden  of  proof. — Upon  the  trial,  the  signature  of  the  indorser 
appeared  to  have  been  cancelled,  and  the  plaintiff  claimed  that  it 
was  cancelled  without  authority :  Held,  that,  under  the  statute,  the 
burden  of  showing  this  was  on  the  plaintiff.  McCorniick  v.  Shea, 
50  Misc.  (N.  Y.)  592. 

§  124.  Alteration  of  instrument — effect  of. — Where 
a  negotiable  instrument  is  materially  altered  without 
the  assent  of  all  parties  liable  thereon,  it  is  avoided, 


20G  THE   NEGOTIABLE   INSTRUMENTS   LAW. 

except  as  against  a  party  who  has  himself  made,  au- 
thorized or  assented  to  the  alteration  and  subsequent 
endorsers.  But  when  an  instrument  has  been  materially 
altered  and  is  in  the  hands  of  a  holder  in  due  course, 
not  a  party  to  the  alteration,  he  may  enforce  payment 
thereof  according  to  its  original  tenor. 

Variant  readings.— In  Illinois  the  words  "  fraudulently  altered 
by  the  holder  "  are  substituted  for  "  materially  altered."  In 
Wisconsin  the  words  "  orally  or  in  writing  "  are  interpolated  after 
the  words  "  authorized  or  assented."  In  South  Dakota  the  words 
"  by  the  holder  "  are  interpolated  after  the  word  "  altered." 

Burden  of  proof. — The  burden  of  explaining  an  apparent  al- 
teration is  upon  the  party  producing  the  paper.  Gowdey  v.  Rob- 
bins,  3  App.  Div.  353;  Ofenstein  v.  Bryan,  20  App.  Cas.  D.  C.  1; 
Town  of  Solon  v.  Williamsburgh  Savings  Bank,  114  N.  Y.  122, 
135;  Simpson  v.  Davis,  119  Mass.  269;  Gettysburg  National  Bank 
v.  Chisolm,  169  Pa.  St.  564;  Citizen's  Nat.  Bank  v.  Williams,  174 
Pa.  St.  66;  Paine  v.  Edsell,  19  Pa.  St.  178.  If  the  paper  appears 
to  have  been  altered  he  must  explain  this  appearance;  but  if,  on 
the  other  hand,  however  material  in  fact  the  alteration  may  be, 
there  is  upon  the  face  of  the  paper  no  evidence  or  mark  raising  a 
suspicion  thereof,  the  holder  is  not  called  upon  to  make  an  explana- 
tion or  to  introduce  any  testimony  until  the  alteration  has  been 
shown  by  sufficient  evidence  outside  of  the  paper.  Harris  v.  The 
Bank  of  Jacksonville,  20  Fla.  501,  512.  And  where  there  is  noth- 
ing on  the  face  of  the  paper  and  no  other  evidence  to  indicate 
an  alteration,  there  is  no  question  to  be  submitted  to  the  jury. 
Brown  v.  Marmaduke,  248  Pa.  St.  247.  But  see  Ensign  v.  Fogg, 
177  Mich.  317,  where  it  was  held  that  if  there  is  nothing  suspicious 
upon  the  face  of  the  paper  beyond  the  fact  that  an  erasure  is 
manifest,  the  presumption  is  that  any  alteration  appearing  thereon 
was  made  before  the  execution  of  the  instrument.  In  Massachu- 
setts when  a  note  or  bill  is  offered  which  appears  to  have  been 
altered,  the  practice  is  for  the  presiding  judge  to  determine,  upon 
inspection  of  the  paper  and  in  view  of  the  state  of  the  evidence 
at  the  time,  whether  further  proof  in  explanation  of  the  altera- 
tion shall  be  required  before  the  instrument  is  admitted.  Wood 
v.  Shelley,  196  Mass.  114. 


DISCHARGE  OF  NEGOTIABLE  INSTRUMENTS.  207 

Recovery  according  to  original  tenor. — The  provision  authoriz- 
ing a  recovery  by  a  holder  in  due  course  according  to  the  original 
tenor  of  the  instrument  changes  the  law  in  some  states.  Prior  to 
the  statute  the  rule  in  many  jurisdictions  was  that  where  the  alter- 
ation was  made  without  the  consent  of  the  party  sought  to  be  charged 
there  could  be  no  recovery  even  by  an  innocent  holder  for  value, 
and  even  though  he  sought  to  recover  on  the  instrument  as  it  was 
before  the  alteration.  Gettysburg  Nat.  Bank  v.  Chisolm,  169  Pa. 
St.  564;  Hartley  v.  Carboy,  150  Pa.  St.  23;  Wood  v.  Steele,  6  Wall. 
80;  Citizen's  Nat.  Bank  v.  Richmond,  121  Mass.  110;  Tower  v. 
Stanley,  220  Mass.  429.  In  the  case  first  cited  it  was  said: 
"  In  the  present  case,  the  alteration  was  not  probably  made 
by  an  agent  of  the  payee,  and  it  was  entirely  without  the  knowledge- 
and  consent  of  the .  defendant,  who  was  the  maker  of  the  note.  Of 
course,  the  payee  could  not  recover  on  the  note  for  any  amount,  be- 
cause it  was  an  altered  instrument,  and  is  avoided  altogether  by 
public  policy.  Certainly  he  could  not  restore  life  to  it  by  passing 
it  over  to  an  indorsee."  But  compare  Gleason  v.  Hamilton,  138 
N.  Y.  353;  Town  of  Solon  v.  Williamsburgh  Savings  Bank,  114 
N.  Y.  122,  134.  For  cases  applying  this  provision  of  the  statute, 
see  Colonial  Nat.  Bank  v.  Duerr,  108  App.  Div.  (N.  Y.)  215; 
Moskowitz  v.  Deutsch,  46  Misc.  (N.  Y.)  602;  Thorpe  v.  White,  188 
Mass.  333;  Broadway  Nat.  Bank  v.  Heffernan,  220  Mass.  247; 
Stone  v.  Sargent,  Id.  245;  Munroe  v.  Stanley,  Id.  438;  Jeffrey  v. 
Rosenfeld,  179  Mass.  506;  Levy  v.  Arons,  81  Misc.  (N.  Y.)  165. 
See  also  Builders'  Lime  &  Cement  Co.  v.  Weimer,  151  N.  W.  Rep. 
(Iowa)  100. 

Same  subject — Paper  overdue. — The  provision  authorizing  a  re- 
covery according  to  the  original  tenor  of  the  instrument  has  no 
application  to  paper  transferred  when  past  due,  since  the  holder 
in  such  case  is  not  a  holder  in  due  course.  Fairfield  Nat.  Bank 
v.  Hammer,  95  Atl.  Rep.   (Conn.)  31. 

Raised  check. — Where  a  bank  has  paid  a  raised  check,  an  ac- 
commodation indorser  may  be  held  for  the  difference  between  the 
check  as  originally  drawn  and  the  amount  to  which  it  was  raised. 
Smith  v.  State  Bank,  104  N.  Y.  Supp.  750. 

Alteration  in  name  of  payee. — The  provision  authorizing  a  re- 
covery according  to  the  original  tenor  of  the  instrument  can  have 
no  application  where  the  alteration  is  in  the  name  of  the  payee. 


208  THE   NEGOTIABLE   INSTRUMENTS  LAW. 

First  Nat.  Bank  v.  Girdley,  112  App.  Div.  (N.  Y.)  398;  Andrews  v. 
Sibley,  220  Mass.  10. 

Difference  between  filling  in  blanks  and  alteration. — Where  the 
paper  has  been  delivered  with  the  amount  blank,  it  is  no  defense 
against  a  bona  fide  holder  for  value  for  the  maker  to  show  that  the 
authority  has  been  exceeded  in  filling  such  blank,  and  a  greater 
amount  written  than  was  intended.  But  if  the  instrument  was 
complete  without  blanks,  at  the  time  of  its  delivery,  the  fraudulent 
increase  of  the  amount  by  taking  advantage  of  a  space  left  without 
such  intention  will  constitute  a  material  alteration.  In  the  latter 
case,  under  section  124,  payment  may  be  enforced  according  to  the 
original  tenor  of  the  instrument.  Nat.  Exchange  Bank  v.  Lester, 
391  N.  Y.  461.  The  difference  between  the  two  cases  is  well  illus- 
trated by  the  case  of  First  Nat.  Bank  of  Wilkes  Barre  v.  B.nniun, 
160  Fed.  Bep.  245.  There  B,  for  the  accommodation  of  his  brother, 
placed  his  indorsement  on  a  printed  form  of  promissory  note,  which 
contained  the  words  "  at  the  Second  National  Bank  of  Wilkes  Barre, 
Pa.,"  and  the  brother,  besides  filling  out  the  blanks,  struck  out  the 
name  of  the  second  National  Bank,  and  inserted  the  name  of  an- 
other bank,  which  discounted  the  note :  Held,  that  while  the  filing 
out  of  the  blanks  was  impliedly  authorized,  the  change  of  the  name 
of  the  bank  where  the  instrument  was  to  be  payable  was  a  material 
alteration  and  discharged  the  indorser. 

Where  blank  spaces  are  left  in  paper. — There  is  no  obligation 
resting  upon  the  maker  or  drawer  to  so  prepare  the  paper  that  no 
one  can  successfully  tamper  with  it;  and  he  is  not  rendered  liable 
for  an  increased  sum  by  the  fact  that  blank  spaces  were  left  before 
the  words  and  figures  specifying  the  amount  so  as  to  invite  altera- 
tion. Nat.  Exchange  Bank  v.  Lester,  194  N.  Y.  461.  Compare 
Timble  v.  Garfield  Nat.  Bank,  121  App.  Div.  (N.  Y.)  870.  See 
also  note  to  section  14. 

Pleading. — In  cases  of  mere  spoliation,  where  the  original  tenor 
was  apparent  upon  inspection,  it  has  been  held  sufficient  to  declare 
on  the  instrument  in  such  form,  and  upon  the  spoliation  being 
shown,  there  is  no  variance  between  the  allegation  and  the  proof. 
Drum  v.  Drum,  133  Mass.  566.  A  similar  rule  would  now  seem  to 
apply  where  there  was  proof  that  the  plaintiff  was  not  a  party  to 
the  alteration.  Whether  the  holder  of  a  note  originally  stated  to  be 
payable  "  with  interest,"  no"  rate  being  named,  and  altered  by  the 


DISCHARGE  OF   NEGOTIABLE   INSTRUMENTS.  209 

insertion  of  the  words  "  seven  per  cent.,"  must  declare  on  the  note 
as  it  was  before  the  alteration  in  order  to  recover  interest  upon  it 
at  six  per  cent.,  quaere.  Massachusetts  National  Bank  v.  Snow, 
187  Mass.  160. 

§  125.  What  constitutes  a  material  alteration. — Any 

alteration  which  changes: 

1.  The  date; 

2.  The  sum  payable,  either  for  principal  or  interest; 

3.  The  time  or  place  of  payment; 

4.  The  number  or  the  relations  of  the  parties; 

5.  The  medium  or  currency  in  which  payment  is  to 
be  made; 

Or  which  adds  a  place  of  payment  where  no  place 
of  payment  is  specified,  or  any  other  change  or  addi- 
tion which  alters  the  effect  of  the  instrument  in  any 
respect,  is  a  material  alteration. 

Alteration  in  date. — See  National  Ulster  County  Bank  v.  Mad- 
den, 114  N.  Y.  280;  Crawford  v.  West  Side  Bank,  100  N.  Y.  50, 
56;  Moskowitz  v.  Deutsh,  46  Misc.  (N.  Y.)  603;  Wood  v.  Steele,  6 
Wall.  80 ;  Newman  v.  King,  54  Ohio  St.  273 ;  Pensecola  State  Bank 
v.  Melton,  210  Fed.  Rep.  57. 

Amount  of  principal. — See  Batchelder  v.  White,  80  Va.  103. 

The  alteration  is  material,  though  the  amount  is  lessened,  as  where 
$500  was  changed  to  $400.    Hewins  v.  Cargill,  67  Me.  554. 

Rate  of  interest. — Adding  the  words  "with  interest  at  six  per 
cent."  is  a  material  alteration.  Broadway  Nat.  Bank  v.  Heffernan, 
220  Mass.  247;  Columbia  Distilling  Co.  v.  Rech,  151  App.  Div.  (N. 
Y.)  128;  Gettysburg  Nat.  Bank  v.  Chisolm,  169  Pa.  St.  564.  So, 
the  addition  of  the  words  "  with  interest  at  eight  per  cent,  per 
annum  after  due  until  paid."  Colonial  Nat.  Bank  v.  Duerr,  108 
App.  Div.  (N.  Y.)  215.  Or  merely  the  words  "  with  interest." 
Dunbrow  v.  Gelb,  72  Misc.  (N.  Y.)  400. 

Time  of  payment. — Changing  the  date  of  maturity  from  May 
15,  1907,  to  May  15,  1908,  is  a  material  alteration.    Pensecola  State 
Bank  v.  Melton,  210  Fed.  Rep.  57.     See  also  Rogers  v.  Bosburgh, 
14 


210  THE  NEGOTIABLE  INSTRUMENTS  LAW. 

87  N.  T.  208;  Weyman  v.  Yeomans,  84  111.  403;  Miller  v.  Gilleland, 
19  Pa.  St.  119. 

Place  of  payment. — See  Tidmarsh  v.  Grover,  1  Maule  &  S.  735; 
Bank  of  Ohio  Valley  v.  Lockwood,  13  W.  Va.  392.  A  note  was 
made  upon  a  printed  blank  in  which  the  People's  Bank  of  "  S  "  was 
named  as  the  place  of  payment.  After  the  note  was  signed,  the 
name  People's  Bank  was  struck  out  and  the  name  First  National 
Bank  of  "  S  "  written  in,  the  latter  having  been  organized  as  suc- 
cessor to  the  People's  Bank  and  which  continued  business  in  the 
same  banking  house :  Held,  that  the  alteration  was  not  material. 
Melton  v.  Pensacola  Bank  &  Trust  Co.,  190  Fed.  Eep.  126,  111  C. 
C.  A.  166. 

Change  in  parties.— Changing  the  name  of  the  payee.  First 
Nat.  Bank  v.  Gridley,  112  App.  Div.  (N.  Y.)  398;  Hoffman  v. 
Planter's  Bank,  99  Va.  480.  The  indorsement  of  a  third  person 
on  the  back  of  a  note  underneath  the  signature  of  the  payee, 
is  conclusively  presumed  to  be  that  of  a  subsequent  indorser,  and 
not  that  of  a  joint  maker  or  surety,  and  hence  it  may  not  be  re- 
garded as  a  material  alteration.  Ensign  v.  Fogg,  177  Mich.  317. 
In  McCaughey  v.  Smith,  27  N.  Y.  39,  and  Brownell  v.  Winnie,  29 
N.  Y.  400,  it  was  held  that  the  addition  of  another  name  as  maker, 
where  there  was  but  one,  was  not  a  material  alteration,  the  additional 
maker  being  regarded  as  a  guarantor.  The  statute  has  probably 
changed  this  rule. 

As  to  medium  of  payment. — Thus,  adding  to  a  note  the  words 
"  in  gold  coin  "  is  a  material  alteration.  Wills  v.  Wilson,  3  Oregon, 
308.  See  also  Angle  v.  Insurance  Co.,  92  U.  S.  330;  Church  v. 
Howard,  17  Hun,  5;  Darwin  v.  Bippey,  63  N.  C.  318;  Bogarth  v. 
Breedlove,  39  Tex.  561. 

Adding  place  of  payment. — See  Whites'ides  v.  Northern  Bank, 
10  Bush,  501. 

Striking  out  stipulation. — Where  the  paper  contains  a  stipula- 
tion which  renders  it  non-negotiable,  the  striking  out  of  such  stipu- 
lation is  a  material  alteration,  since  it  changes  the  instrument  from 
a  non-negotiable  to  a  negotiable  instrument.  Farmers'  Bank  v. 
Scoggins,  41  Okla.  719. 

Where  paper  payable  to  order  is  changed  to  bearer. — A  change 
in  a  note  payable  to  order  by  striking  out  the  words  "  or  order  "  and 


DISCHARGE  OF  NEGOTIABLE  INSTRUMENTS.  211 

inserting  after  trie  name  of  the  payee  the  words  "  or  bearer  "  is  a  ma- 
terial alteration.  Builder's  Lime  &  Cement  Co.  v.  Weimer,  151 
N.  W.  Eep.  (Iowa)  100. 

Addition  of  special  agreement. — See  Weyerhauser  v.  Dun,  100 
N.  Y.  150. 

Adding  name  of  attesting  witness. — In  some  states  it  has  been 
held  that  the  addition  of  the  name  of  an  attesting  witness  is  a  ma- 
terial alteration.  Smith  v.  Dunham,  8  Pick.  246;  Homer  v.  Wal- 
lis,  11  Mass.  310;  Thornton  v.  Appleton,  29  Me.  298;  Brackett  v. 
Mountfort,  11  Me.  115.  But  in  those  states  the  attestation  extends 
the  liability  of  the  maker  under  the  statute  of  limitations,  and  so 
changes  to  some  extent  the  nature  of  the  contract  and  enlarges  its 
obligations.  In  other  states  where  such  addition  would  not  have 
this  effect  the  alteration  would  not  be  material.  Fuller  v.  Green, 
64  Wis.  159. 


212  THE   NEGOTIABLE   INSTRUMENTS   LAW. 


ARTICLE  X. 

Bills  of  Exchange;  Form  and  Interpretation. 

Section  126.  Bill  of  exchange  denned. 

127.  Bill  not  an  assignment  of  funds  in  hands 

of  drawee. 

128.  Bill  addressed  to  more  than  one  drawee. 

129.  Inland  and  foreign  bills  of  exchange. 

130.  When  bill  may  be  treated  as  promissory 

note. 

131.  Referee  in  case  of  need. 

§  126.  Bill  of  exchange  defined.— A  bill  of  exchange 
is  an  unconditional  order  in  writing  addressed  by  one 
person  to  another,  signed  by  the  person  giving  it,  re- 
quiring the  person  to  whom  it  is  addressed  to  pay  on 
demand  or  at  a  fixed  or  determinable  future  time  a  sum 
certain  in  money  to  order  or  to  bearer. 

Essentials   of   a  bill.— The   definition  given  by  Justice  Byles, 

■which  has  often  been  cited,  is  "A  bill  of  exchange  is  an  uncondi- 
tional written  order  from  A  to  B  directing  B  to  pay  C  a  sum  cer- 
tain of  money  therein  named."  Byles  on  Bills,  1.  But  the  objec- 
tion to  this  definition  is  that  it  omits  all  reference  to  the  negotiable 
character  of  the  instrument.  It  is  essential  that  the  drawer  should 
require,  and  not  merely  request,  payment;  but  if  the  language  im- 
ports a  direction  to  pay,  it  is  sufficient,  though  the  direction  is  ex- 
pressed in  words  of  civility,  as  for  example,  where  the  terms  were 
<•'  Mr.  Nelson  will  much  oblige  Mr.  Webb  by  paying  J.  Ruff  or  or- 
der, twenty  guineas  on  his  account."  Ruff  v.  Webb,  1  Esp.  129. 
Formerly  it  seems  to  have  been  essential  to  the  validity  of  a  bill  of 
exchange  that  it  should  be  drawn  in  one  place  and  payable  in  an- 
other. See  note  of  Mr.  Sergeant  Manning  to  Miller  v.  Thompson, 
4  M.  &  G.  200. 


bills  of  exchange;  form  and  interpretation.    213 

§  127.  Bill  not  an  assignment  of  funds  in  hands  of 
drawee. — A  bill  of  itself  does  not  operate  as  an  assign- 
ment of  the  funds  in  the  hands  of  the  drawee  available 
for  the  payment  thereof,  and  the  drawee  is  not  liable 
on  the  bill  unless  and  until  he  accepts  the  same. 

Rule  at  common  law. — This  section  does  not  change  the  law. 
See  Harris  v.  Clark,  3  N.  Y.  93;  Mandeville  v.  Welch,  5  Wheat. 
286;  Brill  v.  Tuttle,  81  N.  Y.  454;  Alger  v.  Scott,  54  N.  Y.  14; 
Hunger  v.  Shannon,  61  N.  Y.  251;  Commonwealth  v.  Am.  Life 
Ins.  Co.,  167  Pa.  St.  586;  Eeilly  v.  Daly,  159  Pa.  St.  605;  Bailey  v. 
Southwestern  B.  B.  Bank,  11  If  la.  266;  Bambo  v.  First  State  Bank, 
88  Kan.  257.  For  a  case  applying  this  section,  see  Clayton  Town 
Site  Co.  v.  Clayton  Drug  Co.,  147  Pac.  Rep.  (N.  M.)  460.  As  to 
checks,  see  section  189  and  note. 

When  order  amounts  to  an  assignment. — When,  for  a  valuable 
consideration  from  the  payee,  the  order  is  drawn  upon  a  third  per- 
son and  made  payable  out  of  a  particular  fund,  then  due  or  to  be- 
come due,  from  him  to  the  drawer,  the  delivery  of  the  order  to  the 
payee  operates  as  an  assignment  pro  tanto  of  the  fund,  and  the 
drawee  is  bound,  after  notice  of  such  assignment,  to  apply  the  fund, 
as  it  accrues,  to  the  payment  of  the  order  and  to  no  other  purpose, 
and  the  payee  may,  by  action,  compel  such  application.  Brill  v. 
Tuttle,  81  K  Y.  454,  457. 

Assignment  by  implication. — An  intention  to  make  an  assign- 
ment of  the  funds  in  the  hands  of  the  drawee  may  be  inferred  from 
the  circumstances  attending  the  delivery  of  the  draft  and  the  con- 
duct of  the  parties.  Throop  Grain  Cleaner  Co.  v.  Smith,  110  N.  Y. 
83. 

§  128.  Bill  addressed  to  more  than  one  drawee. — A 
bill  may  be  addressed  to  two  or  more  drawees  jointly, 
whether  they  are  partners  or  not;  but  not  to  two  or 
more  drawees  in  the  alternative  or  in  succession. 

Variant  readings. — In  Wisconsin  the  words  "  or  in  succession  " 
at  the  end  of  the  section  are  omitted. 


214  THE   NEGOTIABLE   INSTRUMENTS  LAW. 

§  129.    Inland  and  foreign  bills  of  exchange. — An 

inland  bill  of  exchange  is  a  bill  which  is,  or  on  its  face 
purports  to  be,  both  drawn  and  payable  within  this 
State.  Any  other  bill  is  a  foreign  bill.  Unless  the 
contrary  appears  on  the  face  of  the  bill,  the  holder 
may  treat  it  as  an  inland  bill. 

Rule  at  common  law. — It  had  long  been  settled  by  authority 
that  a  bill  drawn  in  one  state  and  addressed  to  the  drawee  in  an- 
other state  is  a  foreign  bill.  Commercial  Bank  of  Kentucky  v. 
Varnum,  49  N.  Y.  269;  Life  Insurance  Company  v.  Pendleton,  112 
IT.  S.  696;  Armstrong  v.  American  Ex.  National  Bank,  133  U.  S. 
433;  Buckner  v.  Finley,  2  Peters,  586;  Joseph  v.  Solomon,  19  Fla. 
■623;  Phoenix  Bank  v.  Hussey,  12  Pick.  483;  Thompson  v.  Com- 
mercial Bank,  3  Caldw.  49;  Union  Bank  v.  Fowlkes,  2  Sneed,  556. 

Foreign  bill  under  the  statute. — Under  this  section  a  bill  ad- 
dressed by  a  firm  doing  business  in  New  York  to  a  firm  doing 
business  in  Visnna  is  a  foreign  bill.  Amsinck  v.  Rogers,  18!< 
N.  Y.  252 ;  Casper  v.  Kuhne,  159  App.  Div.  389.  So,  a  check  dated 
in  one  state,  and  drawn  upon  a  bank  in  another  state,  is  a  foreign 
bill.     Mankey  v.  Hoyt,  27  S.  D.  5C1. 

Cause  of  action — Locality  of. — Where  payment  of  a  demand  bill 
of  exchange,  drawn  on  a  New  York  bank,  is  refused,  a  cause  of 
action  arises  in  this  state  in  favor  of  the  holder  against  the 
drawer.    Riddle  v.  Bank  of  Montreal,  145  App.  Div.  (N.  Y.)  207. 

§  130.  When  bill  may  be  treated  as  promissory  note. 
— Where  in  a  bill  the  drawer  and  drawee  are  the  same 
person,  or  where  the  drawee  is  a  fictitious  person,  or 
a  person  not  having  capacity  to  contract,  the  holder- 
may  treat  the  instrument,  at  his  option,  either  as  a 
bill  of  exchange  or  a  promissory  note. 

Variant  readings. — In  Wisconsin  the  words  "ora  person,"  be- 
fore the  words  "  not  having  capacity  to  contract,"  are  omitted. 

Bill  drawn  by  agent  upon  his  principal.— A  draft  drawn  by  an 
agent  upon  his  principal  by  authority  of  the  latter,  is  equivalent  to 
a  draft  drawn  by  the  principal  and  may  be  treated  as  a  promissory 


BILLS  of  exchange;  form  and  interpretation.    215 

note  under  this  section.  First  Nat.  Bank  v.  Home  Ins.  Co.,  16  N.  M. 
66;  Clemens  v.  Staunton  Co.,  61  Wash.  419. 

§  131.  Referee  in  case  of  need. — The  drawer  of  a  bill 
and  any  indorser  may  insert  thereon  the  name  of  a 
person  to  whom  the  holder  may  resort  in  case  of  need, 
that  is  to  say,  in  case  the  bill  is  dishonored  by  non- 
acceptance  or  non-payment.  Such  person  is  called  the 
referee  in  case  of  need.  It  is  in  the  option  of  the  holder 
to  resort  to  the  referee  in  case  of  need  or  not  as  he  may 
see  fit. 

Variant    reading. —  By    an    error    in    engrossing,    the    word 
"thereon"  is  substituted  for  therein. 

How  referee  indicated. — The  usual  form  is  "In  case  of  need, 
apply  to  Messrs.  C.  and  D,  at  E."    Chitty  on  Bills,  165. 


216  THE   NEGOTIABLE   INSTRUMENTS   LAW. 


ARTICLE  XL 

Acceptance  op  Bills  op  Exchange. 

Section  132.  Acceptance — how  made — form  of. 

133.  Holder  entitled  to  acceptance  on  face  of 

bill. 

134.  Acceptance  by  separate  instrument. 

135.  Promise  to  accept — when  equivalent  to 

acceptance. 

136.  Time  allowed  drawee  to  accept. 

137.  Liability  of  drawee  retaining  or  destroy- 

ing bill. 

138.  Where  bill  incomplete,  etc. 

139.  Kinds  of  acceptances. 

140.  Acceptance  to  pay  at  particular  place. 

141.  Qualified  acceptance. 

142.  Rights  of  parties  as  to  qualified  accept- 

ance. 

§  132.  Acceptance — how  made — form  of. — The  ac- 
ceptance of  a  bill  is  the  signification  by  the  drawee  of 
his  assent  to  the  order  of  the  drawer.  The  acceptance 
must  be  in  writing  and  signed  by  the  drawee.  Tt  must 
not  express  that  the  drawee  will  perform  his  promise 
by  any  other  means  than  the  payment  of  money. 

Nature  of  contract. — The  acceptance  is  a  response  to  the  direc- 
tion contained  in  the  bill,  and  the  language  of  the  bill  anJ  the 
acceptance  are  but  parts  of  one  entire  contract  in  writing.  Meyer 
v.  Beards! ey,  29  N.  J.  Law,  236.  But  this  contract  is  regarded  as 
a  new  contract.     Superior  City  v.  Ripley,  138  U.  S.  93. 

How  acceptance  made. — The  usual  mode  of  making  an  accept- 
ance is  by  writing  the  word  "accepted,"  and  subscribing  the 
drawee's  name.    Byles  on  Bills,  190.    But  the  drawee's  signature 


ACCEPTANCE   OF   BILLS  OF   EXCHANGE.  217 

alone  is  sufficient.     Spear  v.  Pratt,  2  Hill,  582;  Wheeler  v.  Web- 
ster, 1  E.  D.  Smith,  1. 

Acceptance  on  bill. — The  English  Bills  of  Exchange  Act,  follow- 
ing previous  English  statutes  (1  and  2  George  IV.,  C.  78;  19  and 
20  Victoria,  C.  78)  requires  that  the  acceptance  be  written  on  the 
bill.  The  American  statutes  do  not  generally  require  this  (see  1 
Rev.  Stat.,  N.  Y.,  768,  section  6;  Laws  of  Pa.,  1881,  17);  and 
such  a  requirement  would  sometimes  work  inconvenience.  Thus, 
it  has  been  held  that  a  bank  can  accept  a  check  by  telegraph, 
and  such  an  acceptance  has  been  deemed  to  be  within  the  terms 
of  a  statute  requiring  acceptances  to  be  in  writing;  but  to  re- 
quire the  acceptance  to  be  on  the  instrument  itself  would  preclude 
the  giving  of  an  acceptance  by  telegraph  either  by  a  bank  or  by 
any  other  drawee.     See  next  section. 

Oral  acceptance. — At  common  law  an  oral  acceptance  was  suf- 
ficient. Scudder  v.  Union  Bank,  91  U.  S.  406;  Hall  v.  Cordell, 
142  U.  S.  116;  Jones  v.  Council  Bluffs  Branch,  etc.,  34  111.  313; 
Sturges  v.  Chicago  Fourth  Nat.  Bank,  75  111.  595;  Ward  v.  Allen,. 
2  Mete.  53;  Cook  v.  Baldwin,  120  Mass.  317.  The  introduction 
of  this  doctrine,  however,  was  often  regretted.  In  Clark  v.  Coch, 
4  East.  72,  Lawrence.,  J.,  said:  "It  would  have  been  much  better 
doctrine  if  it  had  been  originally  determined  that  nothing  else 
should  amount  to  an  acceptance  than  a  written  acceptance  on  the 
bill  itself." 

Necessity  for  written  acceptance. — The  provision  of  this  section 
that  the  acceptance  must  be  in  writing  applied  in  Izzo  v.  Luding- 
ton,  79  App.  Div.  (N.  Y.)  272;  Faircloth-Byrd  Mer.  Co.  v.  Adkin- 
son,  167  Ala.  344;  Hanna  v.  McCrory,  141  Pac.  Rep.  (N.  M.)  998; 
Nelson  v.  Nelson  Bennett  Co.,  31  Wash.  116;  Wadhams  v.  Port- 
land Elc.  Ry.  Co.,  37  Wash.  86;  Frederick  v.  Spokane  Grain  Co.,. 
47  Wash.  85;  Clayton  Town  Site  Co.  v.  Clayton  Drug  Co.,  147 
Pac.  Rep.  (N.  M.)  460. 

Promise  to  pay  check. — As  the  statute  requires  all  acceptances 
to  be  in  writing,  a  bank  cannot  be  held  upon  the  oral  promise  of 
one  of  its  officers  to  pay  a  check.  Van  Buskirk  v.  State  Bank  of 
Rocky  Ford,  35  Colo.  142;  Rambo  v.  First  State  Bank  of  Argen- 
tine, 88  Kan.  257;  Hanna  v.  McCrory,  141  Pac.  Rep.  (N.  M.) 
998;  Ballen  v.  Bank  of  Krenlin,  37  Okla.  112.     Thus,  where  the 


21S  THE  NEGOTIABLE  INSTRUMENTS  LAW. 

payee  of  a  cheek  visited  the  bank  on  which  the  check  was  drawn 
and  was  assured  that  the  drawer  had  sufficient  funds  on  deposit, 
and  that  if  the  check  were  deposited  in  the  payee's  bank  it  would 
be  honored,  and  the  drawer  withdrew  his  entire  deposit  before 
the  check  was  presented:  Held,  that  under  this  section  the  bank 
was  not  liable.    Ewing  v.  Citizens'  Nat.  Bank,  162  Ky.  551. 

Acceptance  by  telegraph. — H.  sent  a  telegram  to  M.  reading 
"Will  you  wire  me  that  you  will  honor  draft  for  $300,"  and 
M.  telegraphed  back,  "I  will:"  Held,  that  this  was  a  sufficient 
acceptance  under  the  statute.  Oil  Well  Supply  Co.  v.  MacMur- 
phy,  119  Minn.  500.  See  also  First  Nat.  Bank  v.  Muskogee  Pipe 
Line  Co.,  40  Okla.  603;  North  Atchison  Bank  v.  Garretson,  51 
Fed.  Rep.  167. 

Delivery. — The  acceptance  is  incomplete  until  delivery  or  noti- 
fication. First  Nat.  Bank  of  Murfreesboro  v.  First  Nat.  Bank  of 
Nashville,  154  S.  W.  Rep.  (Tenn.)  965. 

Pleading.- — As  the  statute  requires  the  acceptance  to  be  in  writ- 
ing, the  fact  that  it  was  so  given  must  be  pleaded.  Wadhams  v. 
Portland,  etc.,  Ry.  Co.,  37  Wash.  86. 

§  133.  Holder  entitled  to  acceptance  on  face  of  bill. 
- — The  holder  of  a  bill  presenting  the  same  for  accept- 
ance may  require  that  the  acceptance  be  written  on  the 
bill  and,  if  such  request  is  refused,  may  treat  the  bill 
as  dishonored. 

Source  of  section. — See  1  Rev.  Stat.,  N.  Y.,  section  9. 

§  134.  Acceptance  by  separate  instrument. — Where 
an  acceptance  is  written  on  a  paper  other  than  the  bill 
itself,  it  does  not  bind  the  acceptor  except  in  favor 
of  a  person  to  whom  it  is  shown  and  who,  on  the  faith 
thereof,  receives  the  bill  for  value. 

Variant  readings. — In  Illinois  the  words  "  to  whom  it  is  shown 
and,"  after  the  word  "person"  and  before  the  word  "who," 
are  omitted. 

Source  of  section. — See  1  Rev.  Stat..  N.  Y..  768.  section  7. 


ACCEPTANCE  OF  BILLS  OF  EXCHANGE.  219 

Where  paper  is  attached  to  draft. — A  written  agreement  modi- 
fying the  terms  of  an  accepted  bill  and  securely  attached  thereto 
is  a  part  thereof  and  cannot  be  lawfully  detached  therefrom  with- 
out the  maker's  consent.    Bothell  v.  Schweister,  84  Neb.  271. 

Letter  accompanying  bill. — Since  the  acceptance  need  not  be  on 
the  instrument  itself,  a  letter  accompanying  the  bill  may  be  used 
to  qualify  or  limit  an  acceptance  indorsed  on  the  bill.  Lehnhard 
v.  Sidway,  160  Mo.  App.  83.  But,  of  course,  an  innocent  holder 
would  not  be  affected  by  anything  contained  in  the  letter. 

§  135.  Promise  to  accept  —  when  equivalent  to  ac- 
ceptance.— An  unconditional  promise  in  writing  to  ac- 
cept a  bill  before  it  is  drawn  is  deemed  an  actual 
acceptance  in  favor  of  every  person  who,  upon  the 
faith  thereof,  receives  the  bill  for  value. 

Variant  readings. — In  Illinois  the  words  "or  after  "  are  in- 
terpolated after  the  word  "  before." 

Source  of  section. — See  1  Rev.  Stat.,  N.  Y.,  768,  section  8.  The 
section  is  merely  declaratory  of  the  common  law.  Muller  v.  Kling, 
149  App.  Div.  (N.  Y.)  176. 

Oral  promise  to  accept. — The  requirement  that  the  promise  shall 
be  in  writing  is  wholly  statutory.  At  common  law  an  oral  promise 
was  sufficient.  Dull  v.  Bricker,  76  Pa.  St.  255;  Scudder  v.  Union 
Nat.  Bank,  91  U.  S.  406;  Williams  v.  Cinans,  2  Gr.  (N.  J.)  239; 
Jarvis  v.  Wilson,  46  Conn.  91. 

Nature  of  the  promise. — The  promise  must  be  unconditional. 
Germania  National  Bank  v.  Tooke,  101  N.  Y.  442 ;  Shover  v.  West- 
ern Union  Telegraph  Co.,  57  N.  Y.  459,  463.  But  restrictions  as  to 
the  time  or  amount  do  not  prevent  the  promise  from  being  treated 
as  unconditional  and  absolute  as  to  drafts  within  the  limitation. 
Bank  of  Michigan  v.  Ely,  17  Wend.  508;  Ulster  Co.  Bank  v.  Mc- 
Farlan,  5  Hill,  432.  And  an  authority  given  to  an  agent  to  draw 
from  time  to  time,  as  may  be  necessary  in  the  purchase  of  goods, 
or  as  he  may  need  funds,  operates  simply  as  an  instruction  to  the 
agent,  and  does  not,  as  to  persons  dealing  with  him  in  good  faith, 
constitute  a  condition.  Merchants''  Bank  v.  Griswold,  72  N.  Y. 
472;  Bank  of  Michigan  v.  Ely,  17  Wend.  508.     As  to  what  will 


220  THE   NEGOTIABLE   INSTRUMENTS   LAW. 

amount  to  a  promise  to  accept,  see  Bank  of  Morganton  v.  Hay, 
143  N.  C.  32G. 

Representation  of  agent. — The  party  dealing  with  the  agent 
may  rely  upon  his  representation,  express  or  implied,  that  the  draft 
is  in  the  business  of  the  principal,  or  that  the  funds  are  needed, 
and  he  is  protected,  although  it  turns  out  that  the  representation 
is  false.  N.  Y.  &  N.  H.  R.  R.  Co.  v.  Schuyler,  34  N.  Y.  30;  Mer- 
chants' Bank  v.  Griswold,  72  N.  Y.  472. 

Variance. — Where  one  has  agreed  to  accept  a  draft  for  a  cer- 
tain sum,  he  cannot  refuse  payment  because  the  draft,  when  pre- 
sented, includes  the  words  "  with  exchange,"  no  place  of  exchange 
being  named  and  the  draft  being  payable  at  the  residence  of  the 
drawee,  and  the  evidence  failing  to  show  that  exchange  was  sought 
to  be  charged  or  collected.  First  National  Bank  v.  Muskogee  Pipe 
Line  Co.,  40  Okla.  603. 

i 

Promise  by  telegraph. — A  promise  to  accept  given  by  telegraph 
satisfies  the  requirement  that  the  promise  shall  be  in  writing.  John- 
son v.  Clark,  39  N.  Y.  216;  North  Atchison  Bank  v.  Garretson,  51 
Fed.  Rep.  167;  Franklin  Bank  v.  Lynch,  52  Md.  270.  As  to  coun- 
termanding by  telegraph  an  offer  to  accept,  see  First  Nat.  Bank  v. 
Clark,  61  Md.  400. 

Reliance  upon  promise. — The  holder  must  acquire  the  bill  on 
the  faith  of  the  promise  to  accept.  Howland  v.  Carson,  15  Pa.  St. 
453. 

Where  promise  is  conditional. — An  agreement  to  accept  is  still 
but  an  agreement,  and  if  it  is  conditional,  and  a  third  person  takes 
the  bill  knowing  of  the  conditions,  he  takes  subject  to  such  con- 
ditions. Muller  v.  Kling,  149  App.  Div.  (N.  Y.)  176,  181;  Cor- 
rugating Co.  v.  Taylor,  95  Kans.  562.  In  the  case  first  cited  the 
court  said:  "To  be  sure,  the  Negotiable  Instruments  Law  only 
covers  the  case  of  an  unconditional  promise  to  accept,  doubtless 
because,  in  general,  conditions  attached  to  commercial  paper  de- 
prive it  of  the  attribute  of  negotiability,  though  an  acceptance 
of  a  bill  may  be  conditional." 

By  what  law  governed. — A  promise  to  accept  is  governed  by  the 
law  of  the  state  where  it  is  made,  notwithstanding  it  is  to  be  per- 
formed elsewhere.    Scott  v.  Pilkington,  15  Abb.  Pr.  280. 


ACCEPTANCE  OF  BILLS  OF   EXCHANGE.  221 

§  136.  Time  allowed  drawee  to  accept. — The  drawee 
is  allowed  twenty-four  hours  after  presentment  in 
which  to  decide  whether  or  not  he  will  accept  the  bill; 
but  the  acceptance,  if  given,  dates  as  of  the  day  of  pre- 
sentation. 

Reason  for  the  rule. — When  the  bill  is  presented,  it  is  reason- 
able that  the  drawee  should  be  allowed  some  time  to  deliberate 
whether  he  will  accept  or  not;  and  by  the  rule  of  the  law  merchant 
he  was  entitled  to  demand  twenty-four  hours  for  this  purpose, 
and  the  holder  was  justified  in  leaving  the  bill  with  him  for  that 
period.  Byles  on  Bills,  182.  See  also  Case  v.  Burt,  15  Mich.  82. 
See  next  section.  By  the  former  statute  of  Massachusetts,  the 
drawee  had  until  two  o'clock  on  the  day  following.  (Public  Stat- 
utes, 1882,  ch.  77,  section  17.) 

Check  presented  for  acceptance. — Where  a  check  is  presented 
for  acceptance  the  bank  may,  if  it  sees  fit,  demand  twenty-four 
hours  in  which  to  decide  whether  to  accept  or  not.  First  Nat. 
Bank  of  Murfreesboro  v.  First  Nat.  Bank  of  Nashville,  154  S.  W. 
Rep.  (Tenn.)  965.  In  the  case  cited  the  court  appears  to  confuse 
the  case  of  a  check  presented  for  payment  with  the  case  of  a  pre- 
sentment for  acceptance. 

Date  of  acceptance. — The  provision  that  the  acceptance  is  to 
date  as  of  the  day  of  presentation  conforms  to  what  was  the 
common  practice;  but  there  were  no  judicial  decisions  upon  the 
point. 

§  137.  Liability  of  drawee  retaining  or  destroying 
bill. — Where  a  drawee  to  whom  a  bill  is  delivered  for 
acceptance  destroys  the  same,  or  refuses  within  twenty- 
four  hours  after  such  delivery,  or  within  such  other 
period  as  the  holder  may  allow,  to  return  the  bill  ac- 
cepted or  non-accepted  to  the  holder,  he  will  be  deemed 
to  have  accepted  the  same. 

Variant  readings. — In  Illinois  and  South  Dakota  this  section  is 
omitted.  In  Wisconsin  the  following  is  added  at  the  end  of  the 
section:  "  Mere  retention  of  the  bill  is  not  acceptance.' '  In 
Pennsylvania  the  section  has  been  amended  by  the  addition  of  a 


222  THE   NEGOTIABLE   INSTRUMENTS   LAW. 

proviso  as  follows:  "  Provided,  that  the  mere  retention  of  such 
bill  by  the  drawee,  unless  its  return  has  been  demanded,  will  not 
amount  to  an  acceptance;  and  provided  further  that  the  provisions 
of  this  section  shall  not  apply  to  checks."  Laws  1909,  No.  169. 
See  note  below. 

Mere  omission  to  return  bill. — This  section  was  taken  without 
change  from  a  New  York  statute  which  had  been  in  force  for  many 
years.  1  Rev.  Stat.,  N.  Y.,  769,  section  11.  This  statute  had  been 
construed  by  the  Court  of  Appeals,  which  held  that  the  refusal 
spoken  of  meant  an  affirmative  act,  and  that  a  mere  omission  to 
return,  where  there  was  no  demand,  was  not  a  "refusal"  within 
the  meaning  of  the  statute.  Matteson  v.  Moulton,  79  N.  Y.  627. 
See  also  Westberg  v.  Chicago  Lumber  &  Coal  Co.,  117  Wis.  589. 
And  this  seems  to  be  the  plain  import  of  the  langauge  used.  But 
the  Supreme  Court  of  Pennsylvania,  construing  the  section,  held 
that  mere  neglect  to  return  the  paper  may  constitute  such  a  re- 
fusal. Wisner  v.  First  Nat.  Bank,  220  Pa.  St.  21.  In  this  case  cer- 
tain checks  were  forwarded  to  the  drawee  bank  for  collection,  and 
the  drawer  not  having  sufficient  funds  on  deposit  to  pay  them, 
the  bank  delivered  them  for  protest  to  a  notary  public,  who  held 
them  without  protesting  them,  or  giving  notice  of  dishonor,  and 
in  this  way  the  checks  were  retained  for  more  than  two  days  after 
their  delivery  to  the  bank: — Held,  that  such  retention  of  the 
checks  by  the  bank  was  an  acceptance  within  this  section.  But 
it  is  difficult  to  see  how  the  statute  could  apply  to  such  a  state  of 
facts.  It  refers  only  to  cases  where  the  paper  is  presented  for 
acceptance;  and  where  checks  are  remitted  to  the  drawee  bank, 
the  obvious  purpose  is  to  present  them  for  payment,  and  not  mere 
acceptance.  What  the  holder  desires  in  such  a  case,  is  that  tbe 
bank  shall  remit  the  money,  not  that  it  shall  return  the  check 
with  its  acceptance  placed  thereon.  The  decision  of  the  Supreme 
Court  of  Pennsylvania  referred  to  above  led  to  the  amendment  of 
1909;  and  now  in  that  state  all  acceptances  of  checks  must  be  in 
writing,  and  retention  by  the  drawee  cannot,  in  the  case  of  a 
check,  amount  to  an  acceptance.  Union  Nat.  Bank  v.  Franklin 
Nat.  Bank,  249  Pa.  St.  375.    See  note  "Variant  Readings"  above. 

Non-negotiable  paper. —  This  section  has  no  application  where 
the  bill  is  non-negotiable.  First  Nat.  Bank  of  Omaha  v.  Whitmore, 
177  Fed.  Rep.  397. 


ACCEPTANCE  OF  BILLS  OF  EXCHANGE.  223 

§  138.  Where  bill  incomplete  or  has  been  dishonored. 

— A  bill  may  be  accepted  before  it  has  been  signed  by 
the  drawer,  or  while  otherwise  incomplete,  or  when  it 
is  overdue,  or  after  it  has  been  dishonored  by  a  previ- 
ous refusal  to  accept,  or  by  non-payment.  But  when  a 
bill  payable  after  sight  is  dishonored  by  non-accept- 
ance and  the  drawee  subsequently  accepts  it,  the  hol- 
der, in  the  absence  of  any  different  agreement,  is  enti- 
tled to  have  the  bill  accepted  as  of  the  date  of  the  first 
presentment. 

Variant  readings. — In  South  Dakota  the  word  "  payable  "  is  in- 
terpolated between  the  words  "  bill  "  and  "  accepted  "  near  the 
end  of  the  section.    This  is  probably  an  error  in  engrossing. 

§  139.  Kinds  of  acceptances. — An  acceptance  is  either 
general  or  qualified.  A  general  acceptance  assents 
without  qualification  to  the  order  of  the  drawer.  A 
qualified  acceptance  in  express  terms  varies  the  effect 
of  the  bill  as  drawn. 

Place  of  payment. — Where  a  bill  is  addressed  to  the  drawee  in 
one  place,  and  is  accepted  payable  in  another,  this  is  a  material 
variation.  Walker  v.  Bank  of  State  of  N.  Y.,  13  Barb.  636;  Ni- 
agara Bank  v.  Fairman  Co.,  31  Barb.  403.  But  a  bill  addressed 
generally  to  a  drawee  in  a  city  may  be  accepted  payable  at  a 
particular  bank  in  that  city.  Troy  City  Bank  v.  Lanman,  19 
N.  Y.  477;  Meyers  v.  Standart,  11  Ohio  St.  29.  And  a  bill  so 
accepted  is  equivalent  to  a  check.    See  section  87. 

§  140.  Acceptance  to  pay  at  particular  place. — An 
acceptance  to  pay  at  a  particular  place  is  a  general  ac- 
ceptance, unless  it  expressly  states  that  the  bill  is  to  be 
paid  there  only  and  not  elsewhere. 

Acceptance  payable  at  a  particular  place. — Before  the  enact- 
ment of  the  1  and  2  George  IV.,  c.  78,  it  was  a  point  much  dis- 


2'2±  THE   NEGOTIABLE   INSTRUMENTS  LAW. 

puted  whether,  if  a  bill  payable  generally  was  accepted  payable 
at  a  particular  place,  such  an  acceptance  was  a  qualified  one. 
Byles  on  Bills,  194.  The  House  of  Lords  finally  held  that  an 
acceptance  payable  at  a  particular  place  was  a  qualified  accept- 
ance, rendering  it  necessary,  in  an  action  against  the  acceptor, 
to  aver  and  prove  presentment  at  such  place.  Rome  v.  Young,  2 
Brod.  &  Bing.  165,  2  Bligh,  391.  This  led  to  the  passage  of  the 
statute  above  mentioned,  called  Sergeant  Onslow's  act,  which  pro- 
vided that  an  acceptance  payable  at  a  particular  place  should  be 
deemed  a  general  acceptance  unless  expressed  to  be  payable  there 
"only  and  not  otherwise  or  elsewhere."  In  the  United  States  the 
weight  of  authority  has  been  contrary  to  the  decision  of  the  House 
of  Lords,  and  in  favor  of  the  rule  as  stated  in  this  section.  Wal- 
lace v.  McConnell,  13  Peters,  136.    See  also  note  to  section  70. 

§  141.  Qualified  acceptance. — An  acceptance  is  quali- 
fied, which  is: 

1.  Conditional,  that  is  to  say,  which  makes  payment 
by  the  acceptor  dependent  on  the  fulfillment  of  a  condi- 
tion therein  stated; 

2.  Partial,  that  is  to  say,  an  acceptance  to  pay  part 
only  of  the  amount  for  which  the  bill  is  drawn; 

3.  Local,  that  is  to  say,  an  acceptance  to  pay  only  at 
a  particular  place; 

4.  Qualified  as  to  time; 

5.  The  acceptance  of  some  one  or  more  of  the  draw- 
ees, but  not  of  all. 

Where  payment  is  made  to  depend  upon  condition. — Such  an  ac- 
ceptance does  not  become  due  until  the  happening  of  the  contin- 
gency upon  which  the  bill  is  accepted.  Brockway  v.  Allen,  17 
Wend.  40;  Newhall  v.  Clark,  3  Cush.  376;  Myrick  v.  Merritt, 
22  Fla.  335;  Marshall  v.  Burnby,  25  Fla.  619.  A  telegram  in  the 
following  form  "Will  pay  McMillan's  draft  on  me  two  fifty  for 
horses,"  is  not  a  conditional  acceptance  and  the  bank  cashing 
the  same  may  hold  the  acceptor  though  the  money  was  applied 
by  the  drawer  to  another  purpose.  State  Bank  of  Beaver  County 
v.  Bradstreet,  89  Neb.  186. 


ACCEPTANCE   OF   BILLS   OF   EXCHANGE.  225 

§  142.  Rights  of  parties  as  to  qualified  acceptance. — 

The  holder  may  refuse  to  take  a  qualified  acceptance, 
and  if  he  does  not  obtain  an  unqualified  acceptance,  he 
may  treat  the  bill  as  dishonored  by  non-acceptance. 
Where  a  qualified  acceptance  is  taken  the  drawer  and 
indorsers  are  discharged  from  liability  on  the  bill,  un- 
less they  have  expressly  or  impliedly  authorized  the 
holder  to  take  a  qualified  acceptance,  or  subesquently 
assent  thereto.  When  the  drawer  or  an  indorser  re- 
ceives notice  of  a  qualified  acceptance  he  must,  within 
a  reasonable  time,  express  his  dissent  to  the  holder,  or 
he  will  be  deemed  to  have  assented  thereto. 

Liability  where  qualified  acceptance  taken. — But  if  the  holder 
receives  such  an  acceptance  he  can  claim  payment  only  according 
to  the  condition  or  qualification.     Cline  v.  Miller,  8  Md.  274. 

Duty  of  collecting  agent. — An  agent  for  collection,  as,  for  ex- 
ample, a  bank,  has  no  authority  to  receive  anything  short  of  an 
explicit  and  unqualified  acceptance.     Walker  v.  New  York  State 
Bank,  9  N.  Y.  582. 
15 


226  THE  NEGOTIABLE  INSTRUMENTS  LAW. 

ARTICLE  XII. 

Presentment  for  Acceptance. 

Section  143.  When  presentment  for  acceptance  must 
be  made. 

144.  When  failure  to  present  releases  drawer 

and  indorser. 

145.  Requirements  as  to  presentment. 

146.  On  what  days  presentment  may  be  made.. 

147.  Delay  caused  by  previous  presentment. 

148.  When  presentment  is  excused. 

149.  When  dishonored  by  non-acceptance. 

150.  Duty  of  holder  where  bill  not  accepted. 

151.  Rights  of  holder  where  bill  not  accepted. 

§  143.  When  presentment  for  acceptance  must  be 
made. — Presentment  for  acceptance  must  be  made: 

1.  Where  the  bill  is  payable  after  sight,  or  in  any 
other  case,  where  presentment  for  acceptance  is  neces- 
sary in  order  to  fix  the  maturity  of  the  instrument;  or 

2.  Where  the  bill  expressly  stipulates  that  it  shall  be 
presented  for  acceptance;  or 

3.  Where  the  bill  is  drawn  payable  elsewhere  than 
at  the  residence  or  place  of  business  of  the  drawee. 

In  no  other  case  is  presentment  for  acceptance  nec- 
essary in  order  to  render  any  party  to  the  bill  liable. 

Where  bill  is  payable  at  a  day  certain. — Though  the  statute  does 
not  require  that  a  bill  payable  at  a  day  certain  or  at  a  fixed  time 
after  its  date  shall  be  presented  for  acceptance,  yet  the  holder 
has  the  right  to  so  present  it,  and  if  acceptance  be  refused,  may 
treat  the  bill  as  dishonored.  Nat.  Park  Bank  v.  Saitta,  127  App. 
Div.  (N.  Y.)  624.  And  where  a  bank  receives  such  a  bill  for  collec- 
tion, its  duty  is  to  present  the  bill  for  acceptance  without  delay. 
For  it  is  to  the  owner's  interest  that  the  bill  should  be  so  accepted, 
as  only  by  accepting  it  does  the  drawee  become  bound  to  pay  its 


PRESENTMENT   FOR   ACCEPTANCE.  227 

and  until  such  acceptance  the  owner  has  for  his  debtor  only  the 
drawer,  and  the  step  is  one  which  a  prudent  man  of  business, 
ordinarily  careful  of  his  own  interests,  would  take  for  his  pro- 
tection. Allen  v.  Suydam,  17  Wend.  368;  Nat.  Park  Bank  v. 
Saitta,  127  App.  Div.  (N.  Y.)  624.  A  bill  payable  at  a  fixed 
period  from  its  date  may  be  presented  for  acceptance  at  any  time. 
Bachellor  v.  Priest,  12  Pick.  399;  Oxford  Bank  v.  Davis,  4  Cush. 
188. 

When  presentment  for  payment  and  not  acceptance. — See  First 
Nat.  Bank  of  Omaha  v.  Whitmore,  177  Fed.  Rep.  397.  But  com- 
pare Wisner  v.  First  Nat.  Bank,  220  Pa.  St.  21 ;  First  Nat.  Bank 
of  Murfreesboro  v.  First  Nat.  Bank  of  Nashville,  154  S.  W.  Rep. 
(Tenn.)   965. 

§  144.  When  failure  to  present  releases  drawer  and 
indorser. — Except  as  herein  otherwise  provided,  the 
holder  of  a  bill  which  is  required  by  the  next  preceding 
section  to  be  presented  for  acceptance  must  either  pre- 
sent if  for  acceptance  or  negotiate  it  within  a  reason- 
able time.  If  he  fails  to  do  so,  the  drawer  and  all  in- 
dorsers  are  discharged. 

Rule  at  common  law. — This  section  does  not  change  the  law. 
See  Robinson  v.  Ames,  20  Johns.  146;  Gowan  v.  Jackson,  20 
Johns.  176;  Wallace  v.  Agry,  4  Mason,  333;  Prescott  Bank  v. 
Coverly,  7  Gray,  217;  Walsh  v.  Dort,  23  Wis.  334;  Phoenix  Ins. 
Co.  v.  Allen,  11  Mich.  30;  Goupy  v.  Harden,  7  Taunt.  397. 

Delay  in  the  mail. — A  delay  of  the  mail  is  a  sufficient  excuse  for 
the  omission  .to  immediately  present  a  bill  for  acceptance;  and 
a  presentation  immediately  after  its  reception  is  in  time  to  charge 
the  indorser.    Walsh  v.  Blatchley,  6  Wis.  422. 

§  145.  Requirements  as  to  presentment. — Present- 
ment for  acceptance  must  be  made  by  or  on  behalf  of 
the  holder  at  a  reasonable  hour,  on  a  business  day,  and 
before  the  bill  is  overdue,  to  the  drawee  or  some  per- 
son authorized  to  accept  or  refuse  acceptance  on  his 
behalf;  and 


228  THE   NEGOTIABLE   INSTRUMENTS  LAW. 

1.  Where  a  bill  is  addressed  to  two  or  more  drawees 
who  are  not  partners,  presentment  must  be  made  to 
them  all,  unless  one  has  authority  to  accept  or  refuse 
acceptance  for  all,  in  which  case  presentment  may  be 
made  to  him  only; 

2.  Where  the  drawee  is  dead,  presentment  may  be 
made  to  his  personal  representative; 

3.  Where  the  drawee  has  been  adjudged  a  bankrupt 
or  an  insolvent  or  has  made  an  assignment  for  the 
benefit  of  creditors,  presentment  may  be  made  to  him 
or  to  his  trustee  or  assignee. 

Variant  reading. — In  the  New  York  Statute,  by  an  error  in 
engrossing,  the  word  "his,"  before  the  word  "behalf"  has  been 
omitted. 

Where  bill  addressed  to  two  or  more.— See  Byles  on  Bills,  182. 

Authority  of  agent  to  accept. — -The  holder  may  require  the  pro- 
duction by  the  agent  of  a  clear  and  explicit  authority  from  his 
principal  to  accept  in  his  name,  and  without  its  production  may 
treat  the  bill  as  dishonored.  Daniel  on  Negotiable  Instruments, 
section  487. 

Where  one  of  the  drawees  accepts. — But  if  one  of  the  drawees 
accepts  he  will  be  bound  by  his  acceptance.  Smith  v.  Melton, 
133  Mass.  369. 

Where  drawee  is  dead. — Presentment  in  such  ease  is  not  neces- 
sary. See  section  148.  But  as  it  will  be  convenient  in  most  in- 
stances to  have  the  bill  duly  protested,  it  is  well  to  have  some 
one  designated  to  whom  presentment  can  be  made. 

§  146.  On  what  days  presentment  may  be  made. — A 

bill  may  be  presented  for  acceptance  on  any  day  on 
which  negotiable  instruments  may  be  presented  for 
payment  under  the  provisions  of  sections  seventy-two 
and  eighty-five  of  this  act.     When  Saturday  is  not 


PRESENTMENT   FOR   ACCEPTANCE.  229 

otherwise  a  holiday,  presentment  for  acceptance  may 
be  made  before  twelve  o'clock  noon  on  that  day. 

Variant  readings. — In  Arizona,  Kentucky  and  Wisconsin  the  last 
sentence  is  omitted;  and  in  Colorado  the  last  sentence  reads: 
"  When  any  day  is  in  part  a  holiday,  presentment  for  acceptance 
may  be  made  during  reasonable  hours  of  the  part  of  such  day 
which  is  not  a  holiday."  In  North  Carolina  the  word  "  other- 
wise "  after  the  words  "  when  Saturday  is  not  "  are  omitted. 

§  147.  Delay  caused,  by  previous  presentment. — 
Where  the  holder  of  a  bill  drawn  payable  elsewhere 
than  at  the  place  of  business  or  the  residence  of  the 
drawee  has  not  time  with  the  exercise  of  reasonable 
diligence  to  present  the  bill  for  acceptance  before 
presenting  it  for  payment  on  the  day  that  it  falls  due, 
the  delay  caused  by  presenting  the  bill  for  acceptance 
before  presenting  it  for  payment  is  excused  and  does 
not  discharge  the  drawers  and  indorsers. 

§  148.  When  presentment  is  excused. — Presentment 
for  acceptance  is  excused  and  a  bill  may  be  treated  as 
dishonored  by  non-acceptance  in  either  of  the  following 
cases: 

1.  Where  the  drawee  is  dead,  or  has  absconded,  or  is 
a  fictitious  person  or  a  person  not  having  capacity  to 
contract  by  bill; 

2.  Where,  after  the  exercise  of  reasonable  diligence, 
presentment  cannot  be  made; 

3.  Where,  although  presentment  has  been  irregular, 
acceptance  has  been  refused  on  some  other  ground. 

Where  drawee  is  dead. — Prior  to  the  statute  there  was  some 
doubt  as  to  the  proper  course  in  this  case.  See  Daniel  on  Nego- 
tiable Instruments,  section  1178. 

Due  diligence. — As  to  what  will  constitute  due  diligence,  see 
Sulsbacker  v.  Bank  of  Charleston,  86  Tenn.  201. 


230  THE  NEGOTIABLE  INSTRUMENTS  LAW. 

§  149.  When  dishonored  by  non-acceptance. — A  bill 
is  dishonored  by  non-acceptance : 

1.  When  it  is  duly  presented  for  acceptance,  and 
such  an  acceptance  as  is  prescribed  by  this  act  is  re- 
fused or  cannot  be  obtained;  or 

2.  When  presentment  for  acceptance  is  excused  and 
the  bill  is  not  accepted. 

§  150.  Duty  of  holder  where  bill  not  accepted  — 
Where  a  bill  is  duly  presented  for  acceptance  and  is 
not  accepted  within  the  prescribed  time,  the  person 
presenting  it  must  treat  the  bill  as  dishonored  by  non- 
acceptance  or  he  loses  the  right  of  recourse  against  the 
drawer  and  indorsers. 

§  151.   Rights  of  holder  where  bill  not  accepted.— 

When  a  bill  is  dishonored  by  non-acceptance,  an  im- 
mediate right  of  recourse  against  the  drawers  and  in- 
dorsers accrues  to  the  holder,  and  no  presentment  for 
payment  is  necessary. 

See  Sterry  v.  Robinson,  1  Day  (Conn.),  11. 


PROTEST  OF  BILLS  OF  EXCHANGE.  -til 

ARTICLE  XIII. 

Protest. 

Section  152.  In  what  cases  protest  necessary. 

153.  How  protest  made. 

154.  By  whom  protest  made. 

155.  On  what  day  to  be  made. 

156.  Where  to  be  made. 

157.  Protest  both  for  non-acceptance  and  non- 

payment. 

158.  Protest  before  maturity  where  acceptor 

insolvent. 

159.  When  protest  dispensed  with. 

160.  Where  bill  lost,  destroyed  or  wrongly  de- 

tained. 

§  152.  In  what  cases  protest  necessary. — Where  a 
foreign  bill  appearing  on  its  face  to  be  such  is  dis- 
honored by  non-acceptance,  it  must  be  duly  protested 
for  non-acceptance,  and  where  such  a  bill  which  has 
not  previously  been  dishonored  by  non-acceptance  is 
dishonored  by  non-payment,  it  must  be  duly  protested 
for  non-payment.  If  it  is  not  so  protested,  the  drawer 
and  indorsers  are  discharged.  Where  a  bill  does  not 
appear  on  its  face  to  be  a  foreign  bill,  protest  thereof 
in  case  of  dishonor  is  unnecessary. 

Necessity  for  protest. — See  Commercial  Bank  v.  Varnum,  49 
N.  Y.  269,  275;  Halliday  v.  McDougall,  20  Wend.  81;  Dennistoun 
v.  Stewart,  17  How.  (U.  S.)  606;  Phoenix  Bank  v.  Hussey,  12 
Pick.  483.  Protest  is  indispensable,  and  the  proof  cannot  be  sup- 
plied in  any  other  way.  Joseph  v.  Solomon,  19  Fla.  623.  There 
are  several  reasons  why  protest  is  required  in  such  cases:  (1) 
for  the  sake  of  uniformity  in  international  transactions;  (2)  be- 
cause it  affords  satisfactory  evidence  of  dishonor  to  the  drawer, 
who,  from  his  residence  abroad,  might  experience  a  difficulty  in 


2'6'Z  THE   NEGOTIABLE   INSTRUMENTS   LAW. 

making  inquiries  on  the  subject  and  be  compelled  to  rely  on  the 
representations  of  the  holder;  (3)  because,  as  foreign  courts  give 
credit  to  the  acts  of  a  public  functionary,  the  protest  affords  the 
most  satisfactory  evidence  to  charge  an  antecedent  party.  Byles, 
256. 

Foreign  and  inland  bills. — As  to  the  distinction  between  foreign 
and  inland  bills,  see  section  129.  As  to  protest  of  inland  bills  and 
promissory  notes,  see  section  118. 

Foreign  bill — Measure  of  damage. — The  damages  recoverable  by 
the  payee  of  a  negotiable  foreign  bill  of  exchange  protested  for 
non-payment  against  the  drawer  may  be  deemed  to  be  made  up  an 
follows:  (1)  The  face  of  the  bill;  (2)  interest  thereon;  (3)  pro- 
test fees;  (4)  re-exchange,  i.  e.,  the  additional  expense  of  procur- 
ing a  new  bill  for  the  same  amount  payable  in  the  same  place  on 
the  day  of  dishonor;  or  a  percentage  in  lieu  of  such  re-exchange 
in  jurisdictions  where  it  is  prescribed  by  statute.  Pavenstedt  v. 
N.  Y.  Life  Insurance  Co.,  203  N.  Y.  91;  Bank  of  United  States  v. 
United  States,  2  How.  (U.  S.)  745,  764. 

§  153.  How  protest  made. — The  protest  must  be  an- 
nexed to  the  bill,  or  must  contain  a  copy  thereof,  and 
must  be  under  the  hand  and  seal  of  the  notary  making 
it,  and  must  specify: 

1.  The  time  and  place  of  presentment; 

2.  The  fact  that  presentment  was  made  and  the 
manner  thereof; 

3.  The  cause  or  reason  for  protesting  the  bill; 

4.  The  demand  made  and  the  answer  given,  if  any, 
or  the  fact  that  the  drawee  or  acceptor  could  not  be 
found. 

Annexing  certificate  to  bill. — See  Fulton  v.  MacCracken,  18  Md. 
528. 

Signature  of  notary. — The  signature  of  the  notary  may  be 
printed.  Bank  of  Cooperstown  v.  Woods,  28  N.  Y.  561;  Fulton  v. 
MacCracken,  18  Md.  528. 

Seal  of  notary. — See  Donegan  v.  Wood,  49  Ala.  242.  In  other 
cases  it  has  been  held  that  the  official  signature  is  all  that   is 


OOO 


PROTEST.  23 

required.  Huffuker  v.  National  Bank,  12  Bush.  293.  When  the 
court  can  perceive  that  a  seal  is  attached  thereto  the  protest  is 
sufficiently  authenticated;  neither  the  seal  nor  the  signature  of 
the  notary  need  be  proved.    Barry  v.  Crowly,  4  Gill  (Md.)  194. 

Time  of  presentment. — In  the  case  of  a  note,  the  statement  in  a 
notarial  certificate  that  it  was  presented  on  a  certain  day  is  not 
conclusive  upon  the  parties,  but  evidence  is  admissible  to  show 
that  presentment  was  also  made  on  another  day.  Reynolds  v. 
Appleman,  41  Md.  615. 

Insufficient  certificate. — A  certificate  of  a  notary  which  states 
that  he  presented  a  note  for  payment  at  a  certain  town  and 
demanded  payment,  which  was  refused,  but  did  not  state  to  whom 
or  at  what  place  in  the  town  it  was  presented,  does  not  show  such 
a  presentation  to  the  maker  as  will  bind  the  indorser.  Duckert  v. 
Von  Lilienthal,  11  Wis.  56. 

Certificate  as  evidence. — The  notarial  certificate  of  protest  is 
competent,  without  further  proof.  This  has  often  been  so  held 
in  respect  to  foreign  bills.  Porter  v.  Judson,  1  Gray,  175;  Pierce 
v.  Indseth,  106  U.  S.  546 ;  Browne  v.  Philadelphia  Bank,  6  S.  &  R, 
484;  Coruth  v.  Walker,  8  Wis.  252.  For  this  purpose  the  different 
States  of  the  Union  are  deemed  foreign  to  each  other,  so  that  the 
notarial  certificate  of  protest  under  seal  is  good  on  mere  pro- 
duction. Townsley  v.  Sumrall,  2  Pet.  170;  Halliday  v.  McDougall, 
20  Wend.  81;  Carter  v.  Burley,  9  N.  H.  558,  566;  Johnson  v. 
Brown,  154  Mass.  105,  106.  The  certificate  is  evidence  of  the  facts 
therein  set  forth,  although  the  notary,  when  examined,  has  no 
recollection  of  them.  Rossom  v.  Carroll,  90  Tenn.  90;  Sherer  v. 
Easton  Bank,  33  Pa.  St.  134.  And  the  entries  of  a  deceased  notary 
in  his  register  are  admissible.  Spann  v.  Baltzell,  1  Fla.  301;  Por- 
ter v.  Judson,  1  Gray,  175.  When  a  notary  has  neglected  to  keep 
a  record  of  the  notice  which  he  has  served  on  the  non-payment  of 
a  note,  his  oral  testimony  is  admissible  to  prove  its  contents.  Ter- 
bell  v.  Jones,  15  Wis.  253.  Where  the  protest  is  exclusively  relied 
upon  to  prove  the  necessary  facts  to  fix  liability  upon  the  parties 
to  be  affected,  it  must  contain  sufficient  averments  to  show  that 
everything  requisite  has  been  done  on  the  part  of  the  holder,  or 
his  agent,  to  authorize  the  demand  upon  the  indorser.  People's 
Bank  v.  Brooke,  31  Md.  7.  For  a  case  where  the  protest  was  in- 
sufficient, see  Mason  v.  Kilcourse,  71  N.  J.  Law,  472,  473-474. 


234  THE   NEGOTIABLE   INSTRUMENTS  LAW. 

Of  what  facts  certificate  is  evidence. — The  statement  in  the  cer- 
tificate that  notice  of  dishonor  has  been  given  is  received  as  evi- 
dence of  that  fact.  Barry  v.  Crowley,  4  Gill  (Md.)  194;  Rosson  v. 
Carroll,  90  Tenn.  90;  Legg  v.  Vinal,  165  Mass.  555;  Zollner  v.  Mof- 
fitt,  226  Pa.  St.  39.  But  the  notary's  certificate  is  not  evidence 
of  other  collateral  or  independent  facts  it  may  contain,  especially 
when  such  facts  are  not  necessarily  within  the  personal  knowledge 
of  the  notary,  or  are  of  such  a  character  as  could  not  he  estab- 
lished by  his  testimony  if  he  were  produced  as  a  witness.  Weems 
v.  Farmers'  Bank,  15  Md.  231.  Thus,  the  statement  that  the  party 
on  whom  the  demand  was  made  was  ' '  one  of  the  administrators  ' ' 
of  the  acceptor,  does  not  establish  the  facts  of  the  death  of  the 
acceptor,  and  of  the  granting  of  letters  of  administration  on  his 
estate  to  such  party.  (Id.)  So  the  words  "  after  diligent  search 
and  inquiry  to  ascertain  his  whereabouts  "  are  not  admissible  as 
evidence  of  such  "  diligent  search  and  inquiry  "  having  been  made; 
for  this  is  a  conclusion  of  law  which  the  notary  could  not  legally 
draw  or  establish  by  his  Own  testimony.  Reier  v.  Strauss,  54 
Md.  278.  See  also  Ricketts  v.  Pendleton,  14  Md.  320;  Duckert  v. 
Von  Lilienthal,  11  Wis.  56;  Sumner  v.  Bowen,  2  Wis.  524;  Adams 
v.  Wright,  14  Wis.  408. 

§  154.  By  whom  protest  made. — Protest  may  be 
made  by: 

1.  A  notary  public;  or 

2.  By  any  respectable  resident  of  the  place  where 
the  bill  is  dishonored,  in  the  presence  of  two  or  more 
credible  witnesses. 

Variant  readings. — In  Washington  the  word  "  responsible  "  is 
substituted  for  "  respectable  "  in  the  second  subdivision. 

Ncessity  for  personal  demand. — It  would  seem  that,  in  the  ab- 
sence of  any  custom  or  usage  on  the  subject,  the  presentment  and 
demand  must  be  made  by  the  notary  in  person.  Commercial  Bank 
v.  Varnum,  49  N.  Y.  269,  275;  Ocean  Nat.  Bank  v.  Williams,  102 
Mass.  141. 

Where  notary  is  officer  of  bank  owning  paper. — A  notary  who 
is  an  officer  of  a  bank  may  legally  protest  paper  belonging  to  the 
bank.     Nelson  v.  First  National  Bank,  69  Fed.  Rep.  798;  29  U.  S. 


PROTEST.  235 

App.  554.  And  though  he  is  also  a  stockholder  in  the  bank.  More- 
land's  Assignee  v.  Citizens'  Savings  Bank,  97  Ky.  211.  And 
it  has  been  held  that  the  cashier  of  a  bank  who  is  a  notary  may 
legally  protest  his  own  note  which  has  been  discounted  by  the 
bank.    Dykman  v.  Northridge,  1  App.  Div.  (N.  Y.)  26. 

Protest   by   resident.— See   Todd   v.   Neal's   Administrator,  49 
Ala.  273. 

§  155.  On  what  day  to  be  made. — When  a  bill  is 
protested,  such  protest  must  be  made  on  the  day  of  its 
dishonor,  unless  delay  is  excused  as  herein  provided. 
When  a  bill  has  been  duly  noted,  the  protest  may  be 
subsequently  extended  as  of  the  date  of  the  noting. 

Noting. — The  protest  should  be  commenced,  at  least  (and  such 
an  incipient  protest  is  called  noting) ,  on  the  day  on  which  accept- 
ance or  payment  is  refused;  but  it  may  be  drawn  up  and  com- 
pleted at  any  time  before  the  commencement  of  the  suit,  or  even 
before  or  during  the  trial,  and  ante-dated  accordingly.  Byles  on 
Bills,  257. 

§  156.  Where  to  be  made.— A  bill  must  be  protested 
at  the  place  where  it  is  dishonored,  except  that  when 
a  bill  drawn  payable  at  the  place  of  business  or  resi- 
dence of  some  person  other  than  the  drawee,  has  been 
dishonored  by  non-acceptance,  it  must  be  protested 
for  non-payment  at  the  place  where  it  is  expressed  to  be 
payable,  and  no  further  presentment  for  payment  to, 
or  demand  on,  the  drawee  is  necessary. 

Place  of  protest. — See  Daniel  on  Neg.  Inst.,  section  935;  Byles 
on  Bills,  257. 

Further  presentment  for  payment. — See  3  William  IV.  Ch.  98; 
Daniel  on  Neg.  Inst.,  section  935;  Byles  on  Bills,  258. 

§  157.  Protest  both  for  non-acceptance  and  non-pay- 
ment.— A  bill  which  has  been  protested  for  non  ac- 
ceptance may  be  subsequently  protested  for  non-pay- 
ment. 


236  THE   NEGOTIABLE   INSTRUMENTS  LAW. 

§  158.  Protest  before  maturity  where  acceptor  insol- 
vent.— Where  the  acceptor  has  been  adjudged  a  bank- 
rupt or  an  insolvent,  or  has  made  an  assignment  for  the 
benefit  of  creditors,  before  the  bill  matures,  the  holder 
may  cause  the  bill  to  be  protested  for  better  security 
against  the  drawer  and  indorsers. 

§  159.  When  protest  dispensed  with. — Protest  is  dis- 
pensed with  by  any  circumstances  which  would  dis- 
pense with  notice  of  dishonor.  Delay  in  noting  or 
protesting  is  excused  when  delay  is  caused  by  circum- 
stances beyond  the  control  of  the  holder  and  not  im- 
putable to  his  default,  misconduct,  or  negligence. 
When  the  cause  of  delay  ceases  to  operate,  the  bill 
must  be  noted  or  protested  with  reasonable  diligence. 

§  160.  Where  bill  is  lost,  or  destroyed,  or  wrongly 
detained. — Where  a  bill  is  lost  or  destroyed  or  is 
wrongly  detained  from  the  person  entitled  to  hold  it, 
protest  may  be  made  on  a  copy  or  written  particulars 
thereof. 

m 

Protest  on  copy  of  bill. — See  Hinsdale  v.  Miles,  5  Conn.  331. 

Where  bill  is  lost. — Loss  of  the  instrument  does  not  excuse  de- 
mand and  protest.  Daniel  on  Negotiable  Instruments,  section 
1464.    See  also  section  148. 


ACCEPTANCE  OF  BILLS  OF  EXCHANGE  FOR  HONOR.      237 

ARTICLE  XIV. 

Acceptance  for  Honor. 

Section  161.  When  bill  may  be  accepted  for  honor. 

162.  How  acceptance  for  honor  made. 

163.  When  deemed  to  be  an  acceptance  for 

honor  of  the  drawer. 

164.  Liability  of  acceptor  for  honor. 

165.  Agreement  of  acceptor  for  honor. 

166.  Maturity  of  bill  payable  after  sight  ac- 

cepted for  honor. 

167.  Protest  required  where  bill  accepted  for 

honor. 

168.  Presentment  for  payment  to  acceptor  for 

honor — how  made. 

169.  When  delay  in  making  presentment  is 

excused. 

170.  Dishonor  of  bill  by  acceptor  for  honor. 

§  161.  When  bill  may  be  accepted  for  honor. — Where 
a  bill  of  exchange  has  been  protested  for  dishonor  by 
non-acceptance  or  protested  for  better  security,  and  is 
not  overdue,  any  person  not  being  a  party  already  li- 
able thereon  may,  with  the  consent  of  the  holder,  inter- 
vene and  accept  the  bill  supra  protest  for  the  honor 
of  any  party  liable  thereon,  or  for  the  honor  of  the  per- 
son for  whose  account  the  bill  is  drawn.  The  accept- 
ance for  honor  may  be  for  part  only  of  the  sum  for 
which  the  bill  is  drawn;  and  where  there  has  been  an 
acceptance  for  honor  for  one  party,  there  may  be  a 
further  acceptance  by  a  different  person  for  the  honor 
of  another  party. 

See  Byles  on  Bills,  262-266. 


238  THE   NEGOTIABLE  INSTRUMENTS  LAW. 

§  162.  How  acceptance  for  honor  made. — An  accept- 
ance for  honor  supra  protest  must  be  in  writing,  and 
indicate  that  it  is  an  acceptance  for  honor,  and  must 
be  signed  by  the  acceptor  for  honor. 

§  163.  When  deemed  to  be  an  acceptance  for  honor 
of  the  drawer. — Where  an  acceptance  for  honor  does 
not  expressly  state  for  whose  honor  it  is  made,  it  is 
deemed  to  be  an  acceptance  for  the  honor  of  the  drawer. 

§  164.  Liability  of  acceptor  for  honor. — The  acceptor 
for  honor  is  liable  to  the  holder  and  to  all  parties  to 
the  bill  subsequent  to  the  party  for  whose  honor  he 
has  accepted. 

Necessity  for  presentment  to  drawee. — The  acceptor  for  the 
honor  of  the  drawer  cannot  maintain  an  action  thereon  against 
him  without  proof  of  its  presentment  to  the  drawee  and  non- 
acceptance  or  non-payment  by  him,  and  notice  thereof  to  the 
drawer.     Baring  v.  Clark,  19  Pick.  220. 

§  165.  Agreement  of  acceptor  for  honor. — The  ac- 
ceptor for  honor  by  such  acceptance  engages  that  he 
will  on  due  presentment  pay  the  bill  according  to  the 
terms  of  his  acceptance,  provided  it  shall  not  have 
been  paid  by  the  drawee,  and  provided  also,  that  it 
shall  have  been  duly  presented  for  payment  and  pro- 
tested for  non-payment  and  notice  of  dishonor  given 
to  him. 

§  166.  Maturity  of  bill  payable  after  sight  and  ac- 
cepted for  honor. — Where  a  bill  payable  after  sight  is 
accepted  for  honor,  its  maturity  is  calculated  from  the 
date  of  the  noting  for  non-acceptance  and  not  from  the 
date  of  the  acceptance  for  honor. 

§  167.  Protest  required  where  bill  accepted  for  honor. 

■ — Where  a  dishonored  bill  has  been  accepted  for  honor 


ACCEPTANCE  OF  BILLS  OF  EXCHANGE  FOR  HONOR.      239 

supra  protest  or  contains  a  reference  in  case  of  need, 
it  must  be  protested  for  non-payment  before  it  is  pre- 
sented for  payment  to  the  acceptor  for  honor  or  referee 
in  case  of  need. 

§  168.  Presentment  for  payment  to  acceptor  for 
honor — how  made. — Presentment  for  payment  to  the 
acceptor  for  honor  must  be  made  as  follows: 

1.  If  it  is  to  be  presented  in  the  place  where  the  pro- 
test for  non-payment  was  made,  it  must  be  presented 
not  later  than  the  day  following  its  maturity; 

2.  If  it  is  to  be  presented  in  some  other  place  than 
the  place  where  it  was  protested,  then  it  must  be  for- 
warded within  the  time  specified  in  section  one  hun- 
dred and  four. 

Variant  readings. — In  North  Carolina  the  words  "  in  this  chap- 
ter specified  "  are  substituted  for  the  number  of  the  section.  The 
number,  of  course,  varies  in  the  different  states.  In  the  commis- 
sioners' draft  it  was  104;  and  this  is  the  number  in  many  of  the 
states. 

Time  of  presentment. — Doubts  having  arisen  as  to  the  day  when 
the  bill  should  be  again  presented  to  the  acceptor  for  honor,  or 
referee  in  case  of  need,  for  payment,  the  6  and  7  Will.  4,  c.  58, 
enacted  that  it  should  not  be  necessary  to  present,  or  in  case  the 
acceptor  for  honor  or  referee  live  at  a  distance,  to  forward  for 
presentment,  till  the  day  following  that  on  which  the  bill  becomes 
due.    Byles  on  Bills,  263. 

§  169.  When  delay  in  making  presentment  is  ex- 
cused.— The  provisions  of  section  eighty-one  apply 
where  there  is  delay  in  making  presentment  to  the 
acceptor  for  honor  or  referee  in  case  of  need. 

§  170.    Dishonor  of  bill  by  acceptor  for  honor. — 

When  the  bill  is  dishonored  by  the  acceptor  for  honor 
it  must  be  protested  for  non-payment  by  him. 


240  TIIE   NEGOTIABLE   INSTRUMENTS  LAW. 


ARTICLE  XV. 

Payment  for  Honor. 

Section  171.  Who  may  make  payment  for  honor. 

172.  Payment  to  be  attested  by  notary. 

173.  Declaration  before  payment,  for  honor. 

174.  Preference  of  parties  offering  to  pay  for 

honor. 

175.  Effect  of  payment — subsequent  parties- 

rights  of  payer  for  honor. 

176.  Where  holder  refuses  to  receive  payment 

supra  protest. 

177.  Payer  entitled  to  bill  and  protest. 

§  171.  Who  may  make  payment  for  honor. — Where  a 
bill  has  been  protested  for  non-payment,  any  person 
may  intervene  and  pay  it  supra  protest  for  the  honor 
of  any  person  liable  thereon  or  for  the  honor  of  the 
person  for  whose  account  it  was  drawn. 

See  Byles  on  Bills,  267-269;  Daniel  on  Neg.  Inst.,  section  1254. 

§  172.  Payment  to  be  attested  by  notary. — The  pay- 
ment for  honor  supra  protest  in  order  to  operate  as 
such  and  not  as  a  mere  voluntary  payment  must  be 
attested  by  a  notarial  act  of  honor,  which  may  be  ap- 
pended to  the  protest  or  form  an  extension  to  it. 

Rule  at  common  law. — See  Byles  on  Bills,  267;  Daniel  on  Neg. 
Inst.,  section  1258. 

Payment  "by  stranger. — A  stranger  to  the  drawer  and  indorser 
of  a  non-accepted  bill  may  intervene  supra  protest  to  pay  the  same 
for  the  honor  of  the  indorser  or  drawer.  Konig  v.  Bayard,  1  Pet. 
250.     And  it  is  no  objection  to  this  intervention  that  it  has  been 


PAYMENT  OF  BILLS  OF   EXCHANGE  FOR  HONOR.      241 

done  at  the  request  and  under  the  guarantee  of  the  drawer  who 
had  refused  acceptance  or  payment. 

§  173.   Declaration  before  payment  for  honor. — The 

notarial  act  of  honor  must  be  founded  on  a  declaration 
made  by  the  payer  for  honor,  or  by  his  agent  in  that 
behalf  declaring  his  intention  to  pay  the  bill  for  honor 
and  for  whose  honor  he  pays. 

§  174.  Preference  of  parties  offering  to  pay  for  honor. 

— Where  two  or  more  persons  offer  to  pay  a  bill  for  the 
honor  of  different  parties,  the  person  whose  payment 
will  discharge  most  parties  to  the  bill  is  to  be  given  the 
preference. 

§  175.  Effect  of  payment  —  subsequent  parties  — 
rights  of  payee  for  honor. — Where  a  bill  has  been 
paid  for  honor,  all  parties  subsequent  to  the  party  for 
whose  honor  it  is  paid  are  discharged,  but  the  payer 
for  honor  is  subrogated  for,  and  succeeds  to,  both  the 
rights  and  duties  of  the  holder  as  regards  the  party 
for  whose  honor  he  pays  and  all  parties  liable  to  the 
latter. 

See  Daniel  on  Neg.  Inst.,  section  1255. 

§  176.  Where  holder  refuses  to  receive  payment 
supra  protest.— Where  the  holder  of  a  bill  refuses  to 
receive  payment  supra  protest,  he  loses  his  right  of 
recourse  against  any  party  who  would  have  been  dis- 
charged by  such  payment. 

§  177.  Payer  entitled  to  bill  and  protest.— The  payer 
for  honor,  on  paying  to  the  holder  the  amount  of  the 
bill  and  the  notarial  expenses  incidental  to  its  dis- 
honor, is  entitled  to  receive  both  the  bill  itself  and  the 
protest. 

16 


242  THE   NEGOTIABLE  INSTRUMENTS  LAW. 

ARTICLE  XVI. 

Bills  in  a  Set. 

Section  178.  All  the  parts  constitute  one  bill. 

179.  Eights  of  holders  where  different  parts 

are  negotiated. 

180.  Liability  of  holder  who  indorses  two  or 

more  parts  of  a  set  to  different  persons. 

181.  Acceptance  of  bills  drawn  in  sets. 

182.  Payment  by  acceptor  of  bills  drawn  in 

sets. 

183.  Effect  of  discharging  one  of  a  set. 

§  178.  All  the  parts  constitute  one  bill. — Where  a  bill 
is  drawn  in  a  set,  each  part  of  the  set  being  numbered 
and  containing  a  reference  to  the  other  parts,  the  whole 
of  the  parts  constitute  one  bill. 

See  Byles  on  Bills,  387;  Daniel  on  Neg.  Inst.,  section  113;  Dur- 
kin  v.  Cranston,  7  Johns.  442.  It  is  immaterial  that  the  payee 
received  only  the  second  part  of  the  bill,  as  all  the  parts  constitute 
one  bill.    Caras  v.  Thalmann,  138  App.  Div.  (N.  Y.)  297. 

§  179.  Rights  of  holders  where  different  parts  are 
negotiated. — Where  two  or  more  parts  of  a  set  are  ne- 
gotiated to  different  holders  in  due  course,  the  holder 
whose  title  first  accrues  is  as  between  such  holders 
the  true  owner  of  the  bill.  But  nothing  in  this  section 
affects  the  rights  of  a  person  who  in  due  course  accepts 
or  pays  the  part  first  presented  to  him. 

See  Byles  on  Bills,  389;  Walsh  v.  Blatchley,  6  Wis.  422. 

§  180.  Liability  of  holder  who  indorses  two  or  more 
parts  of  a  set  to  different  persons. — Where  the  holder 


BILLS  IN  A  SET.  243 

of  a  set  indorses  two  or  more  parts  to  different  persons 
lie  is  liable  on  every  such  part,  and  every  indorser 
subsequent  to  him  is  liable  on  the  part  he  has  him- 
self indorsed,  as  if  such  parts  were  separate  bills. 

See  Holdsworth  v.  Hunter,  10  C.  B.  449;  Byles  on  Bills,  389. 

§  181.  Acceptance  of  bills  drawn  in  sets. — The  accept- 
ance may  be  written  on  any  part,  and  it  must  be  written 
on  one  part  only.  If  the  drawee  accepts  more  than 
one  part,  and  such  accepted  parts  are  negotiated  to 
different  holders  in  due  course,  he  is  liable  on  every 
such  part  as  if  it  were  a  separate  bill. 

See  Holdsworth  v.  Hunter,  10  C.  B.  449;  Byles  on  Bills,  389. 
Either  of  the  set  may  be  presented  for  acceptance,  and  if  not 
accepted  a  right  of  action  arises,  upon  due  notice,  against  the  in- 
dorser. Dounes  &  Co.  v.  Church,  13  Peters,  205;  Walsh  v.  Blatch- 
ley,  6  Wis.  422,  425. 

§  182.  Payment  by  acceptor  of  bills  drawn  in  sets. — 
When  the  acceptor  of  a  bill  drawn  in  a  set  pays  it  with- 
out requiring  the  part  bearing  his  acceptance  to  be 
delivered  up  to  him,  and  that  part  at  maturity  is  out- 
standing in  the  hands  of  a  holder  in  due  course,  he  is 
liable  to  the  holder  thereon. 

See  Byles  on  Bills,  389. 

§  183.  Effect  of  discharging  one  of  a  set. — Except  as 
herein  otherwise  provided,  where  any  one  part  of  a 
bill  drawn  in  a  set  is  discharged  by  payment  or  other- 
wise the  whole  bill  is  discharged. 

Variant  readings. — In  Wisconsin  two  sections,  under  the  head- 
ing Damages  on  Bills,  are  inserted  at  this  place,  as  follows :  ' '  Sec- 
tion 1682.  Whenever  any  bill  of  exchange  drawn  or  indorsed 
within  this  state  and  payable  without  the  limits  of  the  United 
States  shall  be  duly  protested  for  non-acceptance  or  non-payment 


244  THE   NEGOTIABLE  INSTRUMENTS  LAW. 

the  part}'  liable  for  the  contents  of  such  bill  shall,  on  due  notice, 
and  demand  thereof,  pay  the  same  at  the  current  rate  of  exchange 
at  the  time  of  the  demand  and  damages  at  the  rate  of  five  per 
cent,  upon  the  contents  thereof,  together  with  interest  on  the 
said  contents,  to  be  computed  from  the  date  of  the  protest;  and 
said  amount  of  contents,  damages  and  interest  shall  be  in  full  of 
all  damages,  charges  and  expenses.  Section  1683.  If  any  bill  of 
exchange  drawn  upon  any  person  or  corporation  out  of  this  state, 
but  within  some  state  or  territory  of  the  United  States,  for  the 
payment  of  money  shall  be  duly  presented  for  acceptance  or  pav  - 
ment  and  protested  for  non-acceptance  or  non-payment  the  drawer 
or  indorser  thereof,  due  notice  being  given  of  such  non-acceptance 
or  non-payment,  shall  pay  said  bill  with  legal  interest  according 
to  its  tenor  and  five  per  cent,  damages,  together  with  costs  and 
charges  of  protest.'' 

Rule  at  common  law. — This  section  does  not  change  the  law. 
See  Byles  on  Bills,  388. 

Discharge  of  drawee. — Where  the  drawee  is  discharged  the 
whole  bill  is  discharged.  Caras  v.  Thalmann,  138  App.  Div.  (N.  Y.) 
297.  So,  where  one  of  the  set  is  discharged.  Casper  v.  Kuhne, 
159  App.  Div.  (N.  Y.)  389,  393. 


PROMISSORY   NOTES  AND  CHECKS.  245 


AKTICLE  XVII. 

Promissory  Notes  and  Checks. 

Section  184.  Promissory  note  denned. 

185.  Check  denned. 

186.  Within  what  time  a  check  must  be  pre- 

sented. 

187.  Certification  of  check — effect  of. 

188.  Effect  where  holder  of  check  procures  it 

to  be  certified. 

189.  Check  does  not  operate  as  an  assignment. 

§  184.  Promissory  note  defined.— A  negotiable  prom- 
issory note  within  the  meaning  of  this  act  is  an  un- 
conditional promise  in  writing  made  by  one  person  to 
another,  signed  by  the  maker,  engaging  to  pay  on  de- 
mand, or  at  a  fixed  or  determinable  future  time,  a  sum 
certain  in  money  to  order  or  to  bearer.  Where  a  note 
is  drawn  to  the  maker's  own  order,  it  is  not  complete 
until  indorsed  by  him. 

Non-negotiable  notes — Presumption  as  to  consideration. — This 
section  makes  a  change  in  the  law  of  New  York  as  regards  the 
presumption  of  consideration  in  the  case  of  non-negotiable  notes. 
The  terms  of  the  former  New  York  statute  included  a  note  payable 
to  a  person  named  therein  without  words  of  negotiability.  Carn- 
wright  v.  Gray,  127  N.  Y.  92.  But  as  that  statute  has  been  re- 
pealed, and  as  the  provisions  of  the  Negiotiable  Instruments  Law 
apply  only  to  negotiable  promissory  notes,  it  is  now  necessary  to 
prove  consideration  in  actions  upon  non-negotiable  notes.  Deyo  v. 
Thompson,  53  App.  Div.  (N.  Y.)  12;  St.  Lawrence  Nat.  Bank  v. 
Watkins,  153  Id.  551.  The  rules  on  the  subject  have  differed  in  the 
different  States.  See  Daniel  on  Negotiable  Instruments,  section 
163.  In  Connecticut  the  act  has  made  no  change  in  the  law;  for 
the  rule  in  that  State  has  been  that  a  non-negotiable  note  does 
not  import  a  consideration.     Bristol  v.  Warner,  19  Conn.  17. 


24G  THE   NEGOTIABLE   INSTRUMENTS  LAW. 

Recital  "  value  received  "  in  non-negotiable  note. — The  recital 
"  value  received  "  in  the  body  of  a  non-negotiable  note  is  an 
admission  that  the  instrument  was  issued  for  a  sufficient  considera- 
tion. Owens  v.  Blackburn,  161  App.  Div.  (N.  Y.)  827;  Hamilton 
v.  Hamilton,  127  Id.  871. 

Certificate  of  deposit — Coupons. — A  certificate  of  deposit  in  the 
ordinary  form  is  a  negotiable  promissory  note  within  the  meaning 
of  this  section.  Forrest  v.  Safety  Banking  &  Trust  Co.,  174  Fed. 
Rep.  345.  See  also  Jensen  v.  Wilself ,  36  Nev.  37 ;  Curran  v.  Witter, 
68  Wis.  16;  Maxwell  v.  Agnew,  21  Fla.  154.  And  so  are  coupons 
payable*  to  bearer.     Trustees  of  the  1. 1.  Fund  v.  Lewis,  34  Fla.  424. 

Where  note  is  drawn  to  maker's  own  order. — Under. the  statute, 
a  maker  indorsing  a  note  payable  to  his  own  order  incurs  a  sepa- 
rate and  distinct  liability  as  indorser,  and  may  be  sued  as  such. 
National  Exchange  Bank  v.  Lubrano,  29  R.  I.  64.  But  if  the  note 
is  wholly  void,  as,  for  example,  where  it  has  been  given  to  secure 
an  usurious  loan,  the  maker's  indorsement  adds  nothing  to  the 
strength  of  the  paper,  since  he  is  only  warranting  his  own  con- 
tract. Sabine  v.  Paine,  166  App.  Div.  (N.  Y.)  9.  For  other  eases 
applying  this  provision  of  the  section,  see  Sherman  v.  Goodwin, 
12  Ariz.  42;  Alexander  v.  Hazelrigg,  123  Ky.  677;  Hibernia  Bank 
&  Trust  Co.  v.  Dresser,  132  La.  532. 

Party  indorsing  before  maker. — Under  this  section  it  is  no  de- 
fense to  an  indorser  of  a  note  drawn  to  the  order  of  the  maker 
that  he  signed  his  name  on  the  back  of  the  paper  before  it  was 
indorsed  by  the  maker.  Yonkers  National  Bank  v.  Mitchell,  156 
App.  Div.  (N.  Y.)  318. 

Former  law  in  New  York. — The  former  statute  of  New  York 
provided  that  "notes  made  payable  to  the  order  of  the  maker 
thereof  *  *  *  shall  if  negotiated  by  the  maker,  have  the  same 
effect,  and  be  of  the  same  validity,  as  against  the  maker  and  all 
persons  having  knowledge  of  the  facts  as  if  payable  to  bearer," 
and  hence  the  indorsement  of  the  maker  was  not  required.  1  Rev. 
Stat.  768.     See  Irving  Nat.  Bank  v.  Alley,  79  N.  Y.  536. 

Oral  conditions. — The  maker  will  not  be  allowed  to  prove  an 
oral  condition  that  would  defeat,  or  contradict  the  terms  of,  the 
note,  as,  for  example,  that  he  was  not  to  pay  it  unless  he  should 
receive  the  amount  from  another  person.     Torpey  v.   Tebo,  184 


PROMISSORY  NOTES  AND  CHECKS.  247 

Mass.  307.  Or  that  it  was  to  be  paid  by  installments.  Cauley  v. 
Dunn,  167  N.  C.  32.  Or  that  certain  moneys  were  to  be  credited 
on  it.  Orange  Co.  Trust  Co.  v.  Miller,  149  App.  Div.  (N.  Y.)  292. 
So,  one  maker  of  a  joint  and  several  note  may  not  prove  an  oral 
agreement  that  each  maker  should  be  liable  for  a  proportionate 
part.  Woods  v.  Finley,  153  N.  C.  497.  See  also  Pitt  v.  Little, 
58  Wash.  355.  Nor  may  the  maker  show  that  he  was  to  be  liable 
as  mdorser.  Lumbermen's  Nat.  Bank  v.  Campbell,  61  Ore.  123. 
But  an  agreement  to  renew  is  a  collateral  agreement,  which  does 
not  contradict  the  note.    Keith  v.  Radway,  221  Mass.  515. 

Pleading. — In  an  action  upon  a  promissory  note  payable  to  the 
order  of  the  maker,  it  is  necessary  to  allege  that  the  note  was 
indorsed  by  the  maker.  Edelman  v.  Rams,  58  Misc.  (N.  Y.)  561. 
An  allegation  in  a  complaint  in  an  action  upon  a  non-negotiable 
note  that  the  instrument  was  executed  and  delivered  for  a  "  valu- 
able consideration  "  is  a  statement  of  fact,  and  not  a  conclusion 
of  law.  St.  Lawrence  Nat.  Bank  v.  Watkins,  153  App.  Div.  551 
See  note  to  section  24. 

§  185.  Check  defined. — A  check  is  a  bill  of  exchange 
drawn  on  a  bank  payable  on  demand.  Except  as 
herein  otherwise  provided,  the  provisions  of  this  act 
applicable  to  a  bill  of  exchange  payable  on  demand 
apply  to  a  check. 

When  check  payable  upon  demand. — Unless  a  specific  date  of 
payment  is  mentioned,  the  check  is  payable  upon  demand  under 
section  7.    Riddle  v.  Bank  of  Montreal,  145  App.  Div.  (N.  Y.)  207. 

Distinguishing  characteristic. — One  of  the  characteristics  which 
distinguish  a  check  from  a  bill  of  exchange  is  that  a  check  is 
always  drawn  on  a  bank  or  banker.  Harris  v.  Clark,  3  N.  Y.  93, 
115;  In  the  Matter  of  Brown,  2  Story's  Rep.  502.  See  also  Bull  v. 
Bank  of  Kasson,  123  U.  S.  105 ;  Rogers  v.  Durant,  140  U.  S.  298 ; 
Espy  v.  Bank  of  Cincinnati,  18  Wall.  620;  Merchants'  Bank  v. 
State  Bank,  10  Wall.  604;  Chapman  v.  White,  6  N.  Y.  412;  Harker 
v.  Anderson,  21  Wend.  373 ;  Murray  v.  Judah,  6  Cow.  484 ;  Cruger 
v.  Armstrong,  3  Johns.  5;  Ridgeley  Bank  v.  Patton,  109  111.  484; 
Harrison  v.  Nicollet  Nat.  Bank,  41  Minn.  489;  Northwestern  Coal 
Co.  v.  Bowman,  69  Iowa,  152;  Planters'  Bank  v.  Keese,  7  Heisk. 
200;  Blair  v.  Wilson,  28  Gratt.  170;  Dodd  v.  Jette,  10  Oregon,  31; 
Hopkinson  v.  Forster,  L.  R.  18  Eq.  74.    Tor  cases  applying  the 


24S  THE   NEGOTIABLE  INSTRUMENTS  LAW. 

statute,  see  Wedge  Mines  Co.  v.  Denver  Nat.  Bank,  19  Colo.  App. 
182;  Boswell  v.  Citizens'  Savings  Bank,  123  Ky.  485. 

Cashier's  Checks. — Under  the  statute  cashier's  checks,  whether 
certified  or  otherwise,  are  classed  with  bills  of  exchange  payable 
on  demand.     Singer  Mfg.  Co.  v.  Summers,  143  N.  C.  103. 

Draft  not  payable  immediately. — There  has  been  some  conflict 
in  the  decisions  as  to  whether  a  draft  ujDon  a  bank  not  payable 
immediately  was  a  check  or  bill  of  exchange.  The  latter  view  was 
adopted  in  New  York.  Bowen  v.  Newell,  8  N.  Y.  190;  13  N.  Y.  390. 
To  the  same  effect  also  are  the  following  cases:  Ivory  v.  Bank  of 
the  State,  36  Mo.  475;  Harrison  v.  Nicollet  National  Bank,  41 
Minn.  488;  Georgia  National  Bank  v.  Henderson,  46  Ga.  496;  Min- 
turn  v.  Fisher,  4  Cal.  36;  Morrison  v.  Bailey,  5  Ohio  St.  13.  Con- 
tra: Champion  v.  Gordon,  70  Pa.  St.  474;  Westminster  Bank  v. 
Wheaton,  4  R.  I.  30;  In  re  Brown,  2  Story,  502.  In  all  of  these 
cases  the  particular  question  presented  was  whether  the  instru- 
ment was  entitled  to  grace.  But  now  that  grace  has  been  abol- 
ished the  distinction  is  of  little,  if  any,  practical  importance. 

Necessity  for  presentment  and  notice. — Presentment  and  notice 
of  dishonor  are  necessary  in  order  that  the  holder  may  recover  of 
the  drawer.  Herker  v.  Anderson,  21  Wend.  372;  Dolph  v.  Rice, 
18  Wis.  397.  But  unless' the  check  answers  the  description  of  a 
foreign  bill  protest  is  not  required.  Wittich  v.  First  Nat.  Bank 
of  Pensacola,  20  Fla.  843.     See  section  118. 

§  186.  Within  what  time  a  check  must  be  presented. 
■ — A  check  must  be  presented  for  payment  within  a 
reasonable  time  after  its  issue  or  the  drawer  will  be 
discharged  from  liability  thereon  to  the  extent  of  the 
loss  caused  by  the  delay. 

Variant  readings. — In  Illinois,  after  the  words  "  reasonable 
time  after  its  issue  "  the  following  is  interpolated:  "  and  notice 
of  dishonor  as  provided  for  in  the  case  of  bills  of  exchange." 

Rights  of  indorsers. — It  will  be  noted  that  this  section  applies 
only  to  the  drawer.  The  rights  of  indorsers  are  governed  by 
section  71.  See  note  to  that  section.  As  the  drawer  can  sustain 
a  loss  only  by  the  failure  of  the  bank,  this  section  will  apply  only 


PROMISSORY   NOTES  AND   CHECKS.  249 

in  such  cases;  but  delay  in  presentment  may  result  in  loss  to  an 
indorser  by  tbe  insolvency  of  the  drawer  or  the  withdrawal  of  the 
deposit. 

Where  drawer  is  not  damaged  by  delay. — The  holder's  laches 
in  presenting  a  check  for  payment  constitutes  no  defense  in  an 
action  against  the  drawer  unless  he  is  damaged  by  the  delay,  and 
then  only  to  the  extent  of  his  loss.  A  check  purports  to  be  made 
upon  a  deposit  to  meet  it,  and  presupposes  funds  of  the  drawer 
in  the  hands  of  the  drawee.  But  if  the  drawer  has  no  such  funds 
at  the  time  of  drawing  his  check,  or  subsequently  withdraws  them, 
he  commits  a  fraud  upon  the  payee,  and  can  suffer  no  loss  or 
damage  from  the  holder's  delay  in  respect  to  presentment  or 
notice.  In  such  case  he  is  liable  and  cannot  insist  upon  a  formal 
demand  or  notice  of  non-payment.  First  National  Bank  of  Port- 
land v.  Linn  County  National  Bank,  30  Oregon  296;  Industrial 
Bank  of  Chicago  v.  Bowes,  1C5  111.  70. 

Rule  as  respects  indorsers. — But  while  as  between  the  holder 
and  drawer  of  a  check,  presentment  may  be  made  at  any  time, 
and  delay  in  presentment  does  not  discharge  the  drawer,  unless 
loss  has  resulted  to  him,  a  different  rule  obtains  as  between  holder 
and  indorser.  The  holder,  on  accepting  the  check,  assumes  the 
obligation  to  present  the  same  for  payment  within  the  time  pre- 
scribed by  law,  and  if  payment  is  refused  to  give  notice  of  non- 
payment. A  failure  to  do  this  discharges  the  indorser  from 
liability  as  such  irrespective  of  any  question  of  loss  or  injury. 
Carroll  v.  Sweet,  128  N.  Y.  19;  Smith  v.  Janes,  20  Wend.  192. 

What  is  a  reasonable  time. — The  general  rule  is  that  the  reason- 
able time  allowed  for  presentment  ends  with  the  next  day  after 
the  delivery  of  the  check.  Dehoust  v.  Lewis,  128  App.  Div.  (N.  Y.) 
131;  Smith  v.  Janes,  20  Wend.  192;  Carroll  v.  Sweet,  128  N.  Y. 
19,  22 ;  Turner  v.  Kimble,  37  Okla.  92.  For  instances  of  unreason- 
able delay  see  Industrial  Trust  Title  and  Savings  Co.  v.  Weakley, 
103  Ala.  458;  Gifford  v.  Hardell,  88  Wis.  538;  First  National  Bank 
of  Wymore  v.  Miller,  43  Neb.  791 ;  Comer  v.  Duf our,  95  Ga.  376 ; 
Grange  v.  Reigh,  93  Wis.  552;  Western  Wheeled  Scraper  Co.  v. 
Sadilek,  50  Neb.  105;  Gregg  v.  Beane,  69  Vt.  22;  Holmes  v.  Roe, 
62  Mich.  199.  For  instances  of  presentment  in  due  time,  see  Loux 
v.  Fox,  171  Pa.  St.  68;  Willis  v.  Finley,  173  Pa.  St.  28;  First  Nat. 
Bank  v.  Buckhannon  Bank,  80  Md.  475;  Lloyd  v.  Osborne,  92  Wis. 


250  THE  NEGOTIABLE  INSTRUMENTS  LAW. 

93;  Bell  v.  Alexander,  21  Gratt.  1;  Purcell  v.  Ellemong,  22  Gratt. 
739.  For  eases  applying  this  section  of  the  statute,  see  Gordon  v. 
Levine,  194  Mass.  418,  421;  Aebi  v.  Bank  of  Evansville,  124  Wis. 
73,  77;  Citizens'  Bank  v.  First  Nat.  Bank,  135  Iowa,  605;  Cox  v. 
Citizens'  State  Bank,  73  Kans.  789;  Moskowitz  v.  Deutseh,  40 
Misc.  (N.  Y.)  603;  Singer  Manufacturing  Co.  v.  Summers,  143 
N.  C.  103;  Asbury  v.  Taube,  151  Ky.  142. 

Where  check  is  negotiated.— The  fact  that  the  payee  indorses 
the  check  to  a  third  person  does  not  extend  the  time  for  present- 
ment as  between  the  drawer  and  the  payee.  Dehoust  v.  Lewis, 
128  App.  Div.  (N.  Y.)  131.  But  as  respects  an  indorser,  section 
71  applies,  and  presentment  for  payment  will  be  sufficient  if 
made  within  a  reasonable  time  after  the  last  negotiation  thereof. 
Columbian  Banking  Co.  v.  Bowen,  134  Wis.  218;  Plover  Savings 
Bank  v.  Moodie,  135  Iowa,  685.  See  note  to  section  71.  The 
reason  for  this  distinction  is  obvious.  The  drawer  intends  that 
the  check  shall  be  presented  to  the  bank  for  payment  promptly, 
and  presentment  ought  not  to  be  delayed  at  his  risk.  But  when 
the  payee,  instead  of  presenting  the  check  for  payment,  nego- 
tiates it  and  puts  it  into  circulation,  he  cannot  complain  if  delay 
results  from  his  own  act. 

Death  of  drawer. — The  payment  of  a  check  made  by  a  bank 
after  the  death  of  the  depositor,  but  before  the  bank  has  received 
knowledge  of  that  fact,  is  a  valid  payment,  and  the  bank  is  not 
liable  for  the  amount  to  the  personal  representative  of  the  de- 
positor. Glennan  v.  Kochester  Trust  &  S.  D.  Co.,  209  N.  Y.  12; 
Rogerson  v.  Ladbroke,  1  Bing.  93;  Tate  v.  Hilbert,  2  Ves.  Jun.  112. 
The  original  draft  of  the  Negotiable  Instruments  Law  submitted 
to  the  commissioners  contained  a  provision  (which  was  taken  from 
the  statute  of  Massachusetts)  as  follows:  "The  death  of  the 
drawer  does  not  operate  as  a  revocation  of  the  authority  to  pay  a 
check,  if  the  check  is  presented  for  payment  within  ten  days  from 
the  date  thereof."  But  it  was  thought  by  the  conference  of  com- 
missioners that  this  would  be  objected  to  in  some  of  the  States 
because  of  the  effect  it  might  have  on  the  estates  of  decedents. 

Payment  through  Clearing  House. — The  payment  of  a  Clearing 
House  balance  is  not  a  payment  of  any  particular  check,  and  does 
not  become  so  until  the  time  within  which  the  check  may  be 
returned  has  expired.    Hentz  v.  Nat.  City  Bank,  159  App.  Div. 


PROMISSORY   NOTES  AND  CHECKS.  251 

(N.  Y.)  743;  Merchants'  Nat.  Bank  v.  Nat.  Bank  of  the  Com- 
monwealth, 139  Mass.  513.  And  while  the  adjustment  of  balances 
by  the  clearing-house  constitutes  a  sort  of  tentative  or  provisional 
payment,  that  adjustment  occurs  without  an  opportunity  to  the 
members  to  examine  the  items,  and  regardless  of  whether  the 
checks  are  good;  and,  therefore,  the  question  of  payment  is  not, 
and  cannot  be,  ultimately  decided  until  the  bank  upon  which  the 
check  is  drawn  has  had  an  opportunity  to  examine  the  checks 
at  its  banking  house.  Columbia-Knickerbocker  Trust  Co.  v.  Mil- 
ler, 215  N.  Y.  191. 

Certificate  of  deposit. — As  to  the  time  within  which  a  certificate 
of  deposit  should  be  presented  for  payment,  see  Pierce  v.  State 
Nat.  Bank,  215  Mass.  18. 

§  187.  Certification  of  check  —  effect  of. — Where  a 
check  is  certified  by  the  bank  on  which  it  is  drawn  the 
certification  is  equivalent  to  an  acceptance. 

Rule  at  common  law. — This  section  makes  no  change  in  the  law. 
See  Merchants'  Bank  v.  State  Bank,  10  Wall.  604;  Cooke  v.  State 
Nat.  Bank,  52  N.  Y.  96;  Farmers'  and  Mechanics'  Bank  v. 
Butchers'  and  Drovers'  Bank,  16  N.  Y.  125. 

Effect  of  certification. — Where  a  bank  certifies  a  check  at  the 
request  of  the  payee,  the  effect  is  the  same  as  though  the  funds 
had  been  paid  out  to  him  and  deposited  to  his  own  credit,  and 
hence  the  bank  may  not  refuse  to  pay  the  check  upon  the  ground 
that  it  was  procured  from  the  drawer  by  fraud.  Times  Square 
Auto.  Co.  v.  Rutherford  Nat.  Bank,  77  N.  J.  L.  649.  But  where 
the  certification  is  not  made  at  the  instance  of  the  payee,  or  of  a 
holder  in  due  course,  but  at  the  instance  of  one  who  has  induced 
the  negotiation  of  the  instrument  by  fraud,  and  who  has  not  been 
authorized  to  represent  the  payee,  it  is  not  binding  upon  the  payee. 
Anglo-South  Am.  Bank  v.  Nat.  City  Bank,  161  App.  Div.  (N.  Y.) 
268. 

When  certification  become  effective. — When  the  certification  is 
made  at  the  instance  of  the  drawer,  it  does  not  become  effective 
until  the  delivery  of  the  check  to  the  payee.  Anglo-South  Am. 
Bank  v.  Nat.  City  Bank,  161  App.  Div.  (N.  Y.)  268,  274. 


252  THE   NEGOTIABLE   INSTRUMENTS  LAW. 

Necessity  for  writing. — Section  132  applies  to  an  acceptance  by 
a  bank  as  well  as  by  any  other  drawee,  and  hence  it  must  be  in 
writing;  and  an  action  cannot  be  maintained  against  the  bank  on 
an  oral  promise  to  pay.  See  note  to  section  132,  and  cases  there 
cited. 

Signature  of  indorser. — The  certification  does  not  admit  the 
genuineness  of  the  indorser 's  signature.  First  Nat.  Bank  v. 
Northwestern  Nat.  Bank,  152  111.  296. 

Check  delivered  without  indorsement  of  payee. — Where  a  check 
delivered  without  the  indorsement  of  the  payee  is  afterwards  cer- 
tified by  the  bank,  the  holder  may  recover  of  the  bank,  though 
he  is  unable  to  obtain  the  indorsement  of  the  payee.  Meuer  v. 
Phenix  Nat.  Bank,  94  App.  Div.  (N.  Y.)  331. 

Drawer's  right  of  set-off. — Where  the  bank  has  certified  a  check 
it  may  not  refuse  to  pay  the  same  in  order  that  the  drawer  may 
enforce  a  right  of  set-off  against  the  payee.  Carnegie  Trust  Co. 
v.  First  Nat.  Bank,  213  N.  Y.  301. 

§  188.  Effect  where  the  holder  of  check  procures  it  to 
be  certified. — Where  the  holder  of  a  check  procures  it 
to  be  accepted  or  certified  the  drawer  and  all  indorsers 
are  discharged  from  liability  thereon. 

Reason  for  the  rule. — When  the  holder,  instead  of  insisting 
upon  immediate  payment,  has  the  check  certified,  he,  in  effect, 
causes  the  funds  to  be  withdrawn  from  the  control  of  the  depositor, 
and  leaves  them  with  the  bank  for  his  own  accommodation ;  and  it 
would  be  unjust  that  the  money  should  be  left  in  the  bank  at  the 
risk  of  the  drawer.  Davenport  v.  Palmer,  152  App.  Div.  (N.  Y.) 
761;  Lyons  v.  Union  Exchange  Nat.  Bank,  150  Id.  493;  Bank  v. 
Carter,  88  Tenn.  279.  The  effect  of  the  certification  in  such  case 
is  to  create  a  new  contract  between  the  holder  and  drawee.  Anglo- 
South  Amer.  Bank  v.  Nat.  City  Bank,  161  App.  Div.  (N.  Y.)  268, 
275. 

Where  drawer  has  check  certified. — But  where  the  drawer  causes 
the  check  to  be  certified  before  delivery,  the  same  reason  does  not 
exist  for  holding  him  discharged  from  liability;  and  in  such  case- 


PROMISSORY   NOTES  AND  CHECKS.  253 

the  certification  operates  merely  as  an  assurance  that  the  check  is 
genuine,  and  the  certifying  bank  becomes  bound  with  the  drawer. 
Davenport  v.  Palmer,  152  App.  Div.  (N.  Y.)  761,  763;  Born  v. 
First  Nat.  Bank,  123  Ind.  78 ;  Cincinnati  Oyster  &  Fish  Co.  v.  Nat. 
Lafayette  Bank,  51  Ohio  St.  106;  Andrews  v.  German  Nat.  Bank, 
9  Heisk.  211.  See  also  cases  cited  above.  And  this  is  so  though 
the  drawer  has  the  check  certified  at  the  request  of  the  payee. 
Randolph  Nat.  Bank  v.  Hornblower,  160  Mass.  401. 

Where  bank  taking  check  as  deposit  has  it  certified. — This  sec- 
tion applies  where  a  bank,  which  has  taken  its  customer's  check 
on  another  bank  and  given  him  credit  therefor,  has  the  check 
certified  by  the  drawee.  Lyons  v.  Union  Exchange  Nat.  Bank, 
150  App.  Div.  (N.  Y.)  403. 

Where  name  of  payee  changed  in  certified  check. — An  attorney 
of  a  mortgagee  stated  to  the  mortgagor  that  a  certified  check  would 
be  received  in  payment  of  the  mortgage,  and  when  a  certified  check 
was  offered  in  payment,  demanded  that  it  should  be  made  payable 
to  himself  as  well  as  to  the  mortgagee,  which  was  done,  and  the 
change  noted  on  the  books  of  the  bank :  Held,  that  the  case  was 
not  within  this  section,  and  that  the  drawer  was  not  discharged. 
Davenport  v.  Palmer,  152  App.  Div.  (N.  Y.)  761. 

Where  bank  has  cashed  check. — Where  a  bank  has  cashed  a 
check  upon  a  forged  indorsement,  the  payee  cannot  maintain  an 
action  against  such  bank  to  recover  the  money  collected  by  it  upon 
the  check.  Tibby  Bros.  Glass  Co.  v.  Farmers  &  Mfgrs.  Bank  of 
Sharpsburg,  220  Pa.  1. 

Suit  in  equity. — A  bank  is  not  liable  on  equitable  grounds  to 
the  holder  for  the  amount  of  an  unaccepted  check  which  it  has 
refused  to  pay  though  the  holder  acquired  the  check  on  the  oral 
representation  of  the  bank  that  the  drawer  had  funds  on  deposit 
to  meet  the  check,  and  that  the  check  was  good,  and  that  the 
holder  might  safely  take  it  in  payment  for  goods  sold  the  drawer. 
Rambo  v.  First  Nat.  State  Bank  of  Argentine,  88  Kans.  257. 

§  189.  Check  does  not  operate  as  an  assignment. — A 

check  of  itself  does  not  operate  as  an  assignment  of 


254  THE   NEGOTIABLE   INSTRUMENTS  LAW. 

any  part  of  the  funds  to  the  credit  of  the  drawer  with 
the  bank,  and  the  bank  is  not  liable  to  the  holder,  un- 
less and  until  it  accepts  or  certifies  the  check. 

Rule  at  common  law. — Prior  to  the  statute  there  was  consid- 
erable conflict  in  the  authorities.  The  rule  adopted  in  the  act  is 
supported  by  the  weight  of  authority.  See  Bank  v.  Millard,  10 
Wall.  152;  Bank  v.  Schuyler,  120  U.  S.  511;  Florence  Mills  Co.  v. 
Brown,  124  U.  S.  385;  First  Nat.  Bank  v.  Whitman,  94  U.  S.  343, 
344;  St.  L.  &  S.  F.  Ry.  Co.  v.  Johnston,  133  U.  S.  566;  Attorney- 
General  v.  Continental  Life  Insurance  Co.,  71  N.  Y.  325,  330 ;  First 
Nat.  Bank  of  Union  Mills  v.  Clark,  134  N.  Y.  368;  O'Connor  v. 
Mechanics'  Bank,  124  N.  Y.  324;  Maginn  v.  Dollar  Savings  Bank, 
131  Pa.  St.  362;  Saylor  v.  Bushong,  100  Pa.  St.  27;  Covert  v. 
Rhodes,  48  Ohio  St.  66;  Cincinnati  H.  &  D.  R.  R.  Co.  v.  Metro- 
politan Nat.  Bank,  54  Ohio  St.  60;  Pickle  v.  People's  Nat.  Bank, 
88  Tenn.  380;  Boetcher  v.  Colorado  Nat.  Bank,  15  Col.  16;  Hop- 
kinson  v.  Foster,  L.  R.  18  Eq.  74.  Contra,  Fonner  v.  Smith,  31 
Neb.  107;  Munn  v.  Burch,  25  111.  35;  Bank  v.  Patton,  109  111.  479, 
485;  Nat.  Bank  of  America  v.  Nat.  Bank  of  111.,  164  111.  503. 

Assignment  by  agreement. — But  while  the  mere  making  and  de- 
livery of  a  check  in  the  ordinary  course  of  business  does  not 
operate  as  an  assignment  of  the  fund,  it  is  yet  competent  for  the 
parties  to  create  such  an  assignment  by  a  clear  agreement  or 
understanding,  oral  or  otherwise,  in  addition  to  the  giving  of  the 
check,  that  such  shall  be  the  effect  of  the  transaction.  Fourth 
Street  National  Bank  v.  Yardley,  165  U.  S.  634;  Throop  Grain 
Cleaner  Co.  v.  Smith,  110  N.  Y.  83,  88. 

Application  of  the  statute. — For  eases  applying  this  section,  see 
Hentz  v.  Nat.  City  Bank,  159  App.  Div.  (N.  Y.)  743;  Rambo  v. 
First  State  Bank  of  Argentine,  88  Kans.  257;  Baltimore  &  Ohio 
R.  R.  Co.  v.  First  Nat.  Bank,  102  Va.  753;  Van  Buskirk  v.  State 
Bank,  35  Colo.  69;  Tilby  Bros.  Glass  Co.  v.  Farmers  &  Mechanics' 
Bank,  220  Pa.  St.  1. 

§  326.  Recovery  of  forged  check. — No  bank  shall  be 
liable  to  a  depositor  for  the  payment  by  it  of  a  forged 
or  raised  check,  unless  within  one  year  after  the  re- 
turn to  the  depositor  of  the  voucher  of  such  payment, 


PROMISSORY  NOTES  AND  CHECKS.  255 

such  depositor  shall  notify  the  bank  that  the  check  so 
paid  was  forged  or  raised. 

Origin  of  the  section. — This  section  was  added  by  Laws  of  New 
York,  1904,  ch.  287.  It  does  not  seem  to  be  germane  to  the  Nego- 
tiable Instruments  Law,  and  would  more  properly  have  been  en- 
acted as  an  amendment  to  the  Banking  Law.  Similar  statutes,  but 
varying  in  their  terms,  have  been  enacted  in  Wisconsin,  California, 
South  Dakota,  Michigan,  Washington,  Oregon,  New  Jersey,  Iowa, 
Montana,  North  Carolina,  North  Dakota,  Wyoming,  Idaho,  Kan- 
sas, Maine,  Minnesota,  Ohio,  Oregon,  Louisiana,  Massachusetts  and 
Rhode  Island,  but  not  as  amendments  to  the  Negotiable  Instru- 
ments Law. 

Pleading  section  as  defense. — This  section  establishes  a  general 
rule  of  substantive  law,  and  is  available  as  a  defense  though  not 
specially  pleaded.    Shattuck  v.  Guardian  Trust  Co.,  204  N.  Y.  200. 


256  THE   NEGOTIABLE   INSTRUMENTS  LAW. 


ARTICLE  XVIII.* 

Notes  Given  for  Patent  Rights  and  for  a  Specula- 
tive Consideration. 

Section  330.  Negotiable  instruments  given  for  patent 
rights. 

331.  Negotiable  instruments  given  for  a  specu- 

lative consideration. 

332.  How  negotiable  bonds  are  made  non-negoti- 

able. 

§  330.  Negotiable  instruments  given  for  patent  rights. 

■ — A  promissory  note  or  other  negotiable  instrument, 
the  consideration  of  which  consists  wholly  or  partly 
of  the  right  to  make,  use  or  sell  any  invention  claimed 
or  represented  by  the  vendor  at  the  time  of  sale  to  be 
patented,  must  contain  the  words  "given  for  a  patent 
right"  prominently  and  legibly  written  or  printed  on 
the  face  of  such  note  or  instrument  above  the  signa- 
ture thereto;  and  such  note  or  instrument  in  the  hands 
of  any  purchaser  or  holder  is  subject  to  the  same  de- 
fenses as  in  the  hands  of  the  original  holder;  but  this 
section  does  not  apply  to  a  negotiable  instrument  given 
solely  for  the  purchase  price  or  the  use  of  a  patented 
article. 

Source  of  the  section. — This  section  is  taken  without  change 
from  Laws  N.  Y.  1877,  ch.  65,  section  1.  Similar  statutes  exist  in 
other  States.     See  Laws  of   Pa.  1872,  60. 

Constitutionality  of  section. — This  section  is  not  in  contraven- 
tion of  the  Constitution  of  the  United  States  and  the  Acts  of  Con- 
gress which  secure  to  a  patentee  for  a  limited  time  ''the  full  and 
exclusive  right  and  liberty  of  making,  using  and  vending  to  others 
to  be  used"  his  invention  or  discovery.     Herdie  v.  Roessler,  109 

*This  article  appears  only  in  the  New  York  and  Ohio  acts. 


NOTES  GIVEN  FOR  PATENT  RIGHTS.  257 

N.  Y.  127;  Tod  v.  Wick,  36  Ohio  St.  370;  Haskell  v.  Jones,  86  Pa. 
St.  173;  Shires  v.  Commonwealth,  120  Pa.  St.  368;  Breckhill  v. 
Randall,  102  Ind.  528;  New  v.  Walker,  108  Ind.  365. 

Where  statement  not  omitted. — If  the  note  does  not  contain  the 
statement  required  by  this  section  it  is  unenforcible  between  the 
parties;  but,  if  negotiable  paper,  it  is  valid  in  the  hands  of  a 
holder  in  due  course.  New  v.  Walker,  108  Ind.  365 ;  Kniss  v.  Hol- 
brook,  16  Ind.  App.  229;  Harmon  v.  Hagerty,  88  Tenn.  705.  If 
the  holder  had  knowledge  of  the  facts  the  paper  is  void  in  his 
hands,  though  he  paid  value  for  it,  and  acquired  it  before  maturity. 
Benton  v.  Sakyto,  84  Neb.  808. 

§  331.  Negotiable  instrument  for  a  speculative  con- 
sideration.— If  the  consideration  of  a  promissory  note 
or  other  negotiable  instrument  consists  in  whole  or  in 
part  of  the  purchase  price  of  any  farm  product,  at  a 
price  greater  by  at  least  four  times  than  the  fair  market 
value  of  the  same  product  at  the  time,  in  the  locality, 
or  of  the  membership  and  rights  in  an  association, 
company  or  combination  to  produce  or  sell  any  farm 
product  at  a  fictitious  rate,  or  of  a  contract  or  bond 
to  purchase  or  sell  any  farm  product  at  a  price  greater 
by  fonr  times  than  the  market  value  of  the  same  pro- 
duct at  the  time  in  the  locality,  the  words,  ''given 
for  a  speculative  consideration, ' '  or  other  words  clearly 
showing  the  nature  of  the  consideration,  must  be  prom- 
inently and  legibly  written  or  printed  on  the  face  of 
such  note  or  instrument  above  the  signature  thereof; 
and  such  note  or  instrument,  in  the  hands  of  any  pur- 
chaser or  holder,  is  subject  to  the  same  defenses  as  in 
the  hands  of  the  original  owner  or  holder. 

Source  of  section.- — This  section  was  taken  without  change  from 
Laws  N.  Y.  1874,  ch.  262,  section  1. 

Other  statutes  requiring  statement  of  condemnation. — It  has  be- 
come quite  the  custom  for  the  States  to  pass  laws  requiring  notes 
given  in  various  transactions  to  disclose  the  nature  of  the  con- 
17 


258  THE  NEGOTIABLE   INSTRUMENTS  LAW. 

sideration,  and  one  State  legislature  has  gone  so  far  as  to  require 
that  this  part  of  the  contract  shall  be  written  in  red  ink.  In  con- 
struing one  of  these  stautes,  the  Supreme  Court  of  Wisconsin  has 
said:  "The  sales  of  lightning  rods,  patent  rights,  and  stallions, 
were  evidently  considered  by  the  Legislature  as  transactions,  pre- 
senting quite  similar  opportunities  and  inducements  for  overreach- 
ing by  fraudulent  methods,  and  so  it  was  determined  that  they 
might  well  be  controlled  by  the  same  restrictive  provisions;  but 
there  is  absolutely  no  indication  either  in  the  law  itself  or  in  the 
nature  of  things  that  the  restriction  upon  the  free  sale  of  stallions 
or  lightning  rods  was  considered  in  any  way  dependent  upon  or 
compensated  by  the  restriction  upon  the  sale  of  patent  rights. 
It  is  not  claimed  that  such  a  restriction  upon  the  freedom  of  sales 
of  stallions  is  unreasonable  or  unwarranted.  The  records  of  this 
court  in  recent  years  seem  to  show  that  such  transactions  present 
peculiarly  seductive  opportunities  for  misrepresentation  and  fraud, 
even  surpassing  those  presented  by  the  traditional  horse  trade." 
Quiggle  v.  Herman,  131  Wis.  379.  For  other  cases  construing 
similar  statutes,  see  note  to  section  57. 

§  332.  How  negotiable  bonds  are  made  non-negoti- 
able.— The  owner  or  holder  of  any  corporate  or  muni- 
cipal bond  or  obligation  (except  such  as  are  designated 
to  circulate  as  money,  payable  to  bearer),  heretofore 
or  hereafter  issued  in  and  payable  in  this  State,  but 
not  registered  in  pursuance  of  any  State  law,  may 
make  such  bond  or  obligation,  or  the  interest  coupon 
accompanying  the  same,  non-negotiable,  by  subscrib- 
ing his  name  to  a  statement  indorsed  thereon  that  such 
bond,  obligation  or  coupon  is  his  property;  and  thereon 
the  principal  sum  therein  mentioned  is  payable  only  to 
such  owner  or  holder,  or  his  legal  representatives  or 
assigns,  unless  such  bond,  obligation  or  coupon  be 
transferred  by  indorsement  in  blank,  or  payable  to 
bearer,  or  to  order,  with  the  addition  of  the  assignor's 
place  of  residence. 

Source    of    section. — This    section   was    taken    without    change 
from  Laws  N.  Y.  1871,  ch.  81;  Laws  N.  Y.  1873,  ch.  595. 


laws  repealed;  when  to  take  effect.        259 


AETICLE  XIX.* 

Laws  Repealed;  When  to  Take  Effect. 

Section  340.  Laws  repealed. 

341.  When  to  take  effect 

§  340.  Laws  repealed. — Of  the  laws  enumerated  in 
the  schedule  hereto  annexed,  that  portion  specified  in 
the  last  column  is  hereby  repealed. 

*  Variant  readings. — In  most  of  the  states  this  section  reads: 
"All  acts  and  parts  of  acts  inconsistent  with  this  act  are  hereby 
repealed."    In  some  of  the  states  the  section  is  omitted. 

§  341.  When  to  take  effect. — This  chapter  shall  take 
effect  on  the  first  day  of  October,  eighteen  hundred 
and  ninety-seven. 

Variant  readings. — The  date  mentioned  in  the  section  varies,  of 
course,  in  the  different  states.  In  some  states  the  section  is 
omitted.  In  Arkansas  the  section  reads:  "  This  Act  shall  not 
affect  any  instrument  or  written  contract  now  in  existence,  or 
coming  into  existence  before  it  takes  effect." 

*  The  sections  in  this  article  are  printed  as  they  appear  in  the  New 
York  Statute. 


260  THE   NEGOTIABLE   INSTRUMENTS   LAW. 


SCHEDULE  OF  LAWS  REPEALED.* 

Revised  Statutes.                        Sections. 
R.  S.,  pt.  II.,  ch.  4,  tit,  II All 


Laws  of    Chapter.     Sections. 

1778 33     All. 

1794 48 All. 

1801 44 All. 

1819 34 All. 

1823 216 All. 

1826 17 All. 

1828 20 15,  If  30  (2d  meet.) 

1828 20 1,  HT  51,  272,  393,  460  (2d  meet.) 

1835 141 All. 

1857 416 All. 

1865 309 All. 

1870 438 All. 

1871 84 All. 

1873 595 All. 

1877 65 1,3. 

1887 461 All. 

1888 229 All. 

1891 262 1. 

1894 607 All. 

1897 612 All. 

1897 613 2,  3. 

1898 336 All. 

1904 287 All. 


*Tbis  schedule  comprises  only  the  New  York  statutes. 


INDEX. 


(The  references  are  to  pages.) 


ACCEPTANCE,  meaning  of  term,  6. 
what  it  is,  216. 

must  be  in  writing,  216,  217. 
must  be  signed,  216. 
must  be  for  payment  in  money,  216. 
is  new  contract,  216. 
form  of,  216. 

signature  of  drawee  sufficient,  216,  217. 
promise  to  pay  che^k,  217. 

holder  may  require  it  to  be  on  face  of  bill,  218. 
by  separate  instrument,  218. 
when  acceptance  on  separate  instrument  binds  acceptor, 

218. 
by  telegraph,  218. 

promise  to  accept  deemed  acceptance,  219. 
promise  to  accept  not  affected  by  instruction  to  agent,  219. 
promise  to  accept  must  be  unconditional,  219. 
at  common  law  oral  promise  was  sufficient,  219. 
by  what  law  promise  to  accept  governed,  220. 
conditional  promise  to  accept,  220. 
time  allowed  drawee  in  which  to  accept,  221. 
when  retention  of  bill  amounts  to  acceptance,   221. 
where  bill  incomplete,  223. 
where  bill  overdue,  223. 
after  bill  dishonored,  223. 
date  of  acceptance,  223. 
kinds  of  acceptance,  223. 

what   constitutes  general  acceptance,  223,  224. 
qualified  acceptance,  224. 
conditional,  224. 
local,  224. 
partial,  224. 

agent  cannot  take  qualified  acceptance,  225. 

[261] 


262  INDEX. 

(The  references  are  to  pages.) 

ACCEPTANCE— Continued. 

duty  of  holder  where  bill  dishonored  by  non-acceptance, 

230. 
rights  of  holder  when  bill  not  accepted,  230. 
when  bill  dishonored  by  non-acceptance,  230. 
what  bills  must  be  protested  for  non-acceptance,  231,  232. 
of  bills  in  set,  243. 
ACCEPTANCE  FOR  HONOR,  when  bill  may  be  accepted*  for 

honor,  237. 
how  made,  237. 
for  part  of  sum,  237. 
for  different  parties,  238. 
when  acceptance  does  not  state  for  whose  honor  made, 

238. 
agreement  of  acceptor  for  honor,  238. 
liability  of  acceptor  for  honor,  238. 
maturity  of  bill  payable  after  sight  accepted  for  honor, 

238. 
how  presentment  for  payment  made  to  acceptor  for  honor, 

239. 
dishonor  of  bill  accepted"  for  honor,  239. 
when  delay  in  making  presentment  excused,  239. 
ACCEPTOR,  by  accepting  admits  existence  of  drawer,  120. 
admits  genuineness  of  drawer's  signature,  120. 
admits  drawer's  capacity  to  draw,  120. 
admits  authority  to  draw,  120,  121. 
admits  capacity  of  corporation  to  draw  bill,  121. 
admits  capacity  of  married  woman,  121. 
admits  capacity  of  infant,  121. 
may  not  show  that  drawer  is  a  lunatic,  122. 
not  presumed  to  know  signature  of  indorser,  121. 
not  presumed  to  know  handwriting  in  body  of  bill,  121. 
liability  of  acceptor,  121,  122. 
admits  capacity  of  payee  to  indorse,  122. 
for  accommodation  not  liable  to  drawee,  122. 
demand  for  payment  not  necessary  in  order  te  charge, 

139,  140. 
when  acceptor  insolvent  bill  may  be  protested  for  better 

security,  236. 
ACCEPTOR  FOR  HONOR,  liability  of  acceptor  for  honor,  238. 
agreement  of  acceptor  for  honor,  238. 


INDEX.  263 

(The  references  are  to  pages.) 

ACCOMMODATION  PAPER,  notes  mutually  exchanged  are  not, 
69. 
payment   of  by   party   accommodated   discharges   paper, 
193-195. 
ACCOMMODATION  PARTIES,  liability  of,  67-72. 
accommodation  maker  is  primarily  liable,  7. 
exchange  of  notes,  69. 
married  women  as,  69. 
right  to  retract,  69. 
right  to  impose  conditions,  71. 
discharge  of  by  diversion  of  instrument,  71. 
corporations  as,  69-71. 

knowledge  of  holder  that  paper  for  accomodation,  71. 
partner  indorsing  for  accommodation,  71. 
order  of  liability,  72,  134. 
right  to  subrogation,  72. 
maker  is  primarily  liable,  119. 

acceptor  for  accommodation  not  liable  to  drawer,  122. 
rights   of  on  payment   of   instrument,   203. 
ACTION,  meaning  of,  6. 

restrictive  indorsement  confers  right  to  bring,  79. 
holder  may  bring,  93. 
AGENT,  signature  by,  51. 
authority  of,  51. 
how   authority  shown,  51. 
liability  of  person  signing  as  agent,  52. 
liability  of  where  signature  unauthorized,  52. 
words  which  are  descriptio  personae,  53. 
delay  of  in  making  presentment,  145. 
may  give  notice  of  dishonor,  168. 
notice  of  dishonor  may  be  given  to,  174. 
cannot  take  qualified  acceptance,  225. 
duty  of  to  present  bill  for  acceptance,  226,  227. 
holder  may  require  production  of  agent 's  authority  to  ac- 
cept, 228. 
ALTERATION,  effect  of,  205-209. 

holder  in  due  course  may  enforce  instrument  according 

to  original  tenor,  205,  206,  207. 
what  constitutes  a  material  alteration,  209-211. 
burden  of  explaining,  206. 
difference  between  and  filling  in  blanks,  208. 


264  INDEX. 

(The  references  are  to  pages.) 

ALTERATION— Continued. 

pleading  in  case  of,  208. 

as  to  rate  of  interest,  209. 

as  to  date,  209. 

as  to  sum  payable,  209. 

as  to  time  of  payment,  209. 

as  to  place  of  payment,  209,  210. 

as  to  number  of  parties,  209,  210. 

as  to  relation  of  parties,  209. 

as  to  medium  of  payment,  209,  210. 

addition  of  place  of  payment,  209,  210. 

other  changes,  209. 

striking  out  stipulation,  210. 

where  paper  payable  to  order  is  made  payable  to  bearer, 
210. 

adding  name  of  attesting  witness,  211. 

addition  of  special  agreement,  211. 
AMBIGUOUS  INSTRUMENT,  construction  of,  45-50. 

where  two  or  more  sign  in  the  singular,  50. 
AMOUNT,  uncertainty  as  to,  13. 

ANTECEDENT  DEBT,  constitutes  value,  60,  62,  63,  64. 
ANTEDATED,  instrument  not  invalid  because,  35. 
ASSIGNMENT,  bill  is  not,  213. 

when  bill  may  amount  to,  213. 

cheek  is  not,  253. 

when  check  may  amount  to,  254. 
ASSUMED  NAME,  persons  signing  in,  50,  51. 
ATTORNEY'S  FEE,  provision  for,  14,  15,  16. 

where  amount  not  fixed,  15. 

warranty  respecting,  132. 

BANK,  meaning  of,  6. 

when  bank  discounting  paper  holder  for  value,  97-99. 
cannot   recover  payment  made   on   forged   signature   of 

drawer,  120. 
instrument  payable  at  equivalent  to  order  to  pay,  160. 
presentment  of  instrument  payable  at,  150,  151. 
hours  for  making  presentment,  150. 
bank  custom,  150. 
where  bank  is  closed,  151. 
where  name  of  bank  not  clearly  specified,  151. 


INDEX.  2G5 

(The  references  are  to  pages.) 

BANK— Continued. 

what  will  he  considered  a  hank,  151. 

when  suit  may  be  commenced  upon  paper  payable  at,  151. 

when  bank  not  agent  to  receive  payment,  161. 

duty  of  as  to  notice  of  dishonor,  167. 

as  agent  of  holder,  168. 

need  give  notice  of  dishonor  only  to  its  customer,  170, 181. 

bank  paying  check  cannot  re-issue,  203. 

duty  of  to  present  bill  for  acceptance,  226,  227. 

liability  of  on  certified  check,  251,  252. 

not  liable  on  cheek  unless  it  accepts  or  certifies  the  same, 
253,  254. 
BANK  NOTES,  note  payable  in,  28. 
BEARER,  meaning  of  term,  6. 

instrument  must  be  payable  to  or  order,  11,  12. 

when  instrument  payable  to,  31-34. 

instrument  payable  to  person  named  or  bearer,  31. 

instrument  payable  to  fictitious  person,  31,  32. 

when  payee  not  name  of  any  person,  31. 

when  indorsed  in  blank,  31-34. 

instrument  payable  to  cash  is  payable  to,  34. 

instrument  payable  to  sundries  is  payable  to,  34. 

instrument  payable  to  estate,  33. 

indorsement  of  instrument  payable  to,  83,  133. 

former  rule  in  some  States,  134. 
BILL,  meaning  of  term,  6. 
BILLS  IN  A  SET  constitute  one  bill,  242. 

rights  of  holder  where  different  parts  are  negotiated,  242. 

liability  of  indorser,  242. 

acceptance  of,  243. 

payment  of,  243. 

effect  of  discharging  one  of  a  set,  243,  244. 
BILL  OF  EXCHANGE,  term  "  bill  "  means  bill  of  exchange,  6. 

ambiguous  instrument  may  be  considered  either  bill  or 
note,  47. 

definition  of,  212. 

essentials  of,  212. 

is  not  an  assignment,  212. 

where  drawer  and  drawee  are  same  person,  214. 
may  be  addressed  to  two  or  more  drawees,  213. 
but  not  to  two  or  more  in  the  alternative,  213. 


266  INDEX. 

(The  references  are  to  pages.) 

BILL  OF  EXCHANGE— Continued. 

inland  bill,  what  constitutes,  214. 

foreign  bill,  what  constitutes,  214. 

when  bill  may  be  treated  as  promissory  note,  214. 

when  bill  may  amount  to  an  asignment,  213. 

referee  in  case  of  need,  215. 
BLANKS,  when  may  be  filled,  36-42. 

when  improperly  filled,  36,  42,  308. 

presumption  as  to  authority,  37,  38. 

burden  of  proof,  38. 

intention  of  party  delivering  paper,  38. 

necessity  for  delivery,  38. 

no  authority  to  fill  where  instrument  has  not  been  deliv- 
ered, 38. 

what  may  be  inserted,  38. 

blank  space  with  figures  in  margin,  39. 

true   date   to   be   inserted,   39. 

where  instrument  negotiated  prior  to  completion,  39. 

liability  to  holder  in  due  course,  40. 

space  left  in  completed  instrument,  40. 

alterations,  41. 

whether  payee  may  be  holder  in  due  course,  41. 

difference  between  filling  in  and  alteration,  208. 
BOHEMIAN  OATS  NOTES,  provisions  as  to,  28. 
BONDS,  act  applies  to  municipal  bonds,  3. 

liability  of  person  negotiating,  128,  129. 

how  made  non-negotiable,  258. 
BROKER,  liability  of,  136. 

BURDEN  OF  PROOF,  where  title  of  prior  party  was  defective, 
115-117. 

as  to  notice  of  dishonor,  167. 

is  on  person  alleging  payment,  194. 

to  show  that  indorser  assented  to  extension,  200. 

CANCELLATION  discharges  instrument,  193,  194. 

unintentional  cancellation,  205. 

effect  of,  205. 

burden  of  proof,  205. 
CAPACITY,  acceptance  admits  capacity  of  drawer  to  draw  bill, 
120,  121. 

warranty  of  where  negotiation  by  delivery,  127-129. 

warranty  of  by  general  indorser,  129-131. 


INDEX.  267 

(The  references  are  to  pages.) 

*'  CASH,"  instrument  payable  to,  34. 
CASHIER,  instrument  payable  to,  84,  85. 

not  disqualified  to  act  as  notary,  235. 

may  protest  his  own  note,  235. 
CERTAINTY,  where  event  is  certain  to  happen,  21. 
CERTIFICATE  OF  DEPOSIT,  warranty  by  indorser,  132. 

payable  on  demand  must  be  presented  within  reasonable 
time,  145. 
CERTIFICATION,  effect  of,  251-253. 

equivalent  to  acceptance,  251. 

where  holder  has  check  certified,  252. 

where  drawer  has  check  certified,  252,  253. 
CHECK  defined,  247,  248. 

delay  in  presentment  where  check  is  negotiated,  144. 

time  allowed  bank  to  accept,  221. 

difference  between  check  and  bill,  247,  248. 

presentment  and  notice  of  dishonor  necessary,  248. 

within  what  time  must  be  presented,  248-251. 

effect  of  delay,  248-251. 

certification  of,  251,  252. 

is  not  assignment,  253,  254. 

agreement   for   assignment   by,  254. 
CLEARING  HOUSE,  payment  through,  250. 
COLLATERAL  NOTES,  2,  3,  24,  25. 
COLLATERAL   SECURITIES,  provision   for   sale   of,   22. 

that  holder  has  is  no  defense  to  maker,  118. 

that  indorser  has  deposited  is  no  defense  to  maker,  119. 

must  be  tendered  with  instrument,  149. 

holder  receiving  collaterals  not  required  to  proceed  upon 
before  suing  indorser,  158. 

surrender  of  discharges  indorser,  201. 
"  COLLECTION,"  indorsement  for,  78,  79. 

effect  of,  78,  79. 

liability  of  indorser,  130. 
CONDITIONAL  INDORSEMENT,  party  paying  may   disregard 
condition,  82. 

indorsee  holds  subjects  to  rights  of  indorser,  82. 
CONFESSION  OF  JUDGMENT,  provision  for,  23,  25,  26. 
CONFLICT  OF  LAWS,  by  what   laws   demand  of  payment   de- 
termined, 140. 

by  what  law  validity  of  promise  to  accept  determined,  220. 

bill  payable  in  foreign  country,  140. 


2G8  INDEX. 

(The  references  are  to  pages.) 

CONSIDERATION,  presumption  as  to,  59. 

statement  of  nature  of,  2G. 

what  constitutes,  60. 

antecedent  debt,  is,  60-62;  63-64. 

non-negotiable  instrument,  60. 

absence  or  failure  of,  65-67. 

partial  failure  of,  65-67. 

accommodation  parties,  67-72. 

presumption  as  to  in  case  of  non-negotiable  note,  59,  245, 
246. 

failure  of  consideration  does  not  require  proof  of  good 
faith,  117. 

none  necessary  to  support  waiver,  157. 

instrument  given  for  speculative  consideration,  257. 

requirement  that  consideration  be  stated,  111,  257-258. 
CONTINGENCY,  instrument  payable  on  is  not  negotiable,  20-22. 
CORPORATION  included  in  word  "  person,"  6. 

liability  of  officers  signing,  54. 

as  an  accommodation  party,  69-71. 

delivery  of  paper  of  by  officer  for  personal  debt,  70-71. 

acceptor  admits  capacity  of  to  draw,  121. 

officer  of  indorsing,  123. 
COSTS  OF  COLLECTION,  provision  for,  14. 
CURRENT  MONEY,  designation  of  particular  kind  of,  26,  28. 

DATE,  absence  of  does  not  affect  validity  of  instrument,  26. 

presumption  as  to  date,  27,  35-46. 

evidence  to  show  mistake  as  to   date,  35. 

instrument  presumed  to  be  made  where  dated,  35. 

instrument  may  be  ante-dated,  35. 

may  be  post-dated,  35. 

when  date  may  be  inserted,  36-48. 

insertion  of  wrong  date,  36. 

alteration  of  date,  209. 

from  what  date  law  takes  effect,  259. 
DAYS  OF  GRACE,  abolished,  158. 

rule  not  uniform,  158-160. 
DEFENSES,  when  instrument  subject  to,  113-115. 

nature  of,  115,  116. 

who  liable  to,  113-117. 
DEFINITIONS,  meaning  of  terms  used  in  act,  6. 


INDEX.  269 

(The  references  are  to  pages.) 

DELAY,  when  delay  in  presenting  for  payment  is  excused,  106, 
154. 
in  giving  notice  of  dishonor,  189. 
in  presenting  check,  144,  248-251. 
DELIVERY,  meaning  of  term,  6. 

of  incomplete  instrument,  42. 
contract  revocable  until  delivery,  43. 
must  be  authorized,  43,  44. 
presumption  as  to  delivery,  43,  44. 
necessary  to  convey  title,  43,  44. 
conditional  delivery,  44,  45. 

presumed  in  favor  of  holder  in  due  course,  44,  45. 
instrument  payable  to  order  of  drawer,  45. 
'   upon  condition,  45. 
pleading  delivery,  46. 
possession  is  prima  facie  proof  of,  46. 
is  negotiation  of  instrument  payable  to  bearer,  74. 
necessary  to  make  indorsement  complete,  74. 
of  bill  or  check  implies  representation  tlu.^  drawee  is  in 

funds,  121,  122. 
warranty  where  negotiation  by  delivery,  127-129. 
DEMAND,  INSTRUMENT  PAYABLE  ON,  instrument  must  bo 
payable  on  demand  or  at  determinable  future  time,  11. 
instrument  expressed  to  be  payable  on,  28. 
payable  at  sight,  28. 
payable  on  presentation,  28. 
when  no  time  expressed,  28,  29. 

instrument  issued,  etc.,  when  overdue  is  payable  on  de- 
mand, 28,  29. 
distinction  between  and  instruments  payable  on  demand 

and  at  sight,  28,  29. 
when  words,  "  on  demand  "  may  be  added,  29. 
legal  intendment  cannot  be  changed  by  patrol,  29. 
instrument  payable  on  demand  negotiated  an  unreason- 
able time  after  its  issue,  92. 
overdue  bill  is  payable  on,  29. 

when  instrument  payable  on  demand  must  be  presented, 
141-145. 
DETERMINABLE   FUTURE   TIME,   instrument   must   be   pay- 
able at,  11. 
what  is,  19. 


270  INDEX. 

(The  references  are  to  pages.) 

DETERMINABLE  FUTURE  TIME— Continued. 

fixed  period  after  date  or  sight  is,  20. 

on  or  before  fixed  time  is,  20. 

on  or  after  event  certain  to  happen  is,  20. 
DISCHARGE  OF  INSTRUMENT  by  payment  on  behalf  of  prin- 
cipal debtor,  193. 

where  principal   debtor  becomes  holder   after  maturity, 
193. 

by  cancellation,  193. 

by  other  act,  193. 

by  payment  by  party  accommodated,  193,  194. 

of  one  part  of  a  bill  drawn  in  a  set,  174. 
DISCHARGE  OF  PARTY  SECONDARILY  LIABLE  by  discharge 
of  instrument,  195,  196. 

by  cancellation  of  signature,  196. 

by  discharge  of  prior  party,  196. 

by  tender  by  prior  party,  196,  197. 

by  release   of  princij:>al  debtor,  196-198. 

reservation  of  rights  against  surety,  196-198. 

extension  of  time,  when  will  discharge,  196,  198-201. 

mere  indulgence  will  not  discharge,  198. 

where  holder  allows  statute  of  limitations  to  run  against 
principal  debtor,  197. 

extending  time  to  plead  will  not  discharge,  199. 

accommodation  maker  not  discharged  by  extension  granted 
indorser,  200,  201. 
DISCOUNTING  PAPER,  when  bank  holder  for  value,  62,  97-99. 
DISHONOR,  when  instrument  dishonored  by  non-payment,  157. 
DRAWEE  must  be  named  or  indicated  in  instrument,  11. 

not  liable  until  acceptance,  213. 

bill  may  be  addressed  to  two  or  more,  213. 

but  not  'to  two  or  more  in  the  alternative,  213. 

time  allowed  in  which  to  accept,  221. 

retaining  or  destroying  bill  is  liable  as  acceptor,  221,  222. 
DRAWER,  instrument  payable  to  order  of,  45. 

engagement  of  by  drawing  bill,  119. 

admission  of,  119. 

liability  of,  119. 

may  negative  liability,  119. 

existence   of  admitted  by   acceptor,  120. 

when  presentment  not  necessary  to  charge,  153. 


INDEX.  271 

(The  references  are  to  pages.) 

DRAWER— Continued. 

right  of  recourse  to,  157. 

notice   of   dishonor  must  be   given   to,   166. 

when  notice  of  dishonor  need  not  be  given  to,  185. 

when  released  by  failure  to  present  bill  for  acceptance, 
227. 

liability  of  where  bill  dishonored  by  non-acceptance,  230. 

when  protest  necessary  in  order  to  charge,  231. 

of  check  discharged  if  holder  has  check  certified,  252,  253. 
DRUNKENNESS,  as  a  defense,  111. 
DUE  DILIGENCE,  when  question  of  law,  154, 155, 189. 

when  question  of  fact,  154. 

what  will  constitute,  155,  187-189,  248-251. 
DURESS,  instrument  or  signature  obtained  by,  101. 

ELECTION,  right  of,  23,  26. 

ESTATE,  instrument  payable  to,  33. 

EXCHANGE,  provision  for,  14. 

EXECUTORS,  indorsement  by,  132. 

EXEMPTIONS,  waiver  of  26, 

EXHIBITION  OF  INSTRUMENT,  when  necessary,  103,  112. 

when  excused,  149. 

payment  without,  163,  164. 
EXTENSION,  stipulation  for,  21. 

FEDERAL  COURT,  how  far  bound  by  statute,  15. 
FICTITIOUS  PAYEE,  when  drawer  estopped  to  allege  that  payee 

is,  119. 
FICTITIOUS  PERSON,  when  instrument  payable  to  order  of  is 
payable  to  bearer,  31,  32,  33. 
whether  instrument  payable  to  order  of  estate  is,  33,  34. 
paper  issued  to  one  fraudulently  impersonating  another, 

56-57. 
when  maker  estopped  to  allege  that  payee  is,  119. 
presentment  for  payment  not  required  where  drawee  is 
fictitious  person,  155. 
FIGURES,    where   there    is   a    discrepancy   between    words    and 
figures,  46. 
effect  of,  46,  47. 
FISCAL  OFFICER,  instrument  payable  to,  84,  85. 
FOREIGN  LANGUAGE,  instrument  may  be  written  in,  35. 


272  INDEX. 

(The  references  are  to  pages.) 

FOREIGN  BILL,  what  is,  214. 

FORGED  SIGNATURE  confers  no  right,  56. 

when  party  estopped  to  allege  forgery,  57,  58. 

on  travelers   checks,  58. 
FRAUD,  instrument  or  signature  obtained  by,  101,  102,  117. 

where  fraud  is  subsequent  to  liability,  117. 

GAMBLING  DEBT,  note  given  for,  108,  109. 

GENUINENESS,  warranty  of  where  negotiations  by  delivery,  127. 

warranty  of  where  negotiation  by  qualified  indorsement, 
127. 

when  warranty  of  not  implied,  128. 

warranty  of  by  general  indorser,  129. 

acceptor  admits  signature  of  drawer,  120,  121. 

acceptance  does  not  admit  signature  of  indorser,  121. 

nor  handwriting  in  body  of  instrument,  121. 
GOLD   COIN,  note  payable  in,  28. 

GOODS  AND  MERCHANDISE,  instruments  payable  in,  12. 
GUARANTOR,  when  person  becomes  such,  122. 

when  proceedings  against  principal  are  necessary,  167. 

not  entitled  to  notice  of  dishonor,  167. 
GUARANTY,  conditional  guaranty,  158. 

HOLDER,  meaning  of  term,  6. 

may  sue  in  his  own  name,  93. 

may  receive  payment,  93,  94. 

may  sue  any  party,  113,  133. 

rights  of  where  bill  dishonored  by  non-acceptance,  230. 

duty  of  where  bill  not  accepted,  230. 

refusal  to  receive  payment  for  honor,  241. 

by  having  check  certified  discharges  drawer  and  indorsers, 
252,  253. 

of  checks  cannot  recover  of  bank  on  check  until  it  ac- 
cepts or  certifies  the  same,  253,  254. 
HOLDER  FOR  VALUE,  what  constitutes,  60-63. 

person  having  lien  is,  63-65. 

when  bank  discounting  note  is,  97-99. 
HOLDER  IN  DUE  COURSE,  what  constitutes,  94-99. 

who  is  not,  ,94-99. 

incomplete  or  irregular  instrument,  95. 

post-dated  instrument,  95. 


INDEX.  273 

(The  references  are  to  pages.) 

HOLDER  IN  DUE  COURSE— Continued, 
payee  as,  96. 
overdue  paper,  96. 
where  interest  is  overdue,  97. 
where  instalment  overdue,  97. 
when  paper  deemed  overdue,  97. 
in  case  of  instrument  payable  on  demand,  100. 
where  full  amount  has  not  been  paid  before  notice,  1U0, 

101. 
what  constitutes  notice  of  equities,  102-107. 
holds  instrument   free  from   equities,  107-113. 
may  recover  full  face  value,  107-112. 
where  paper  made  in  violation  of  statute,  108-111. 
drunkness  as  a  defense,' 111. 
rights  of  person  claiming  under  holder  in   due   course, 

113,  114. 
when  burden  on  holder  to  prove  that  he  took  instrument 

in  due  course,  115-117. 
holder  may  testify  that  he  acted  in  good  faith,  117. 
HOLDER  OF  OFFICE,  instrument  payable  to  order  of,  31. 
HOLIDAY,  when  day  for  doing  act  falls  on,  8. 
instrument  falling  due  on,  158-160. 

ILLEGAL  STIPULATIONS,  not  validated,  23. 
INCOMPLETE  INSTRUMENT,  filling  blanks,  36-42. 

not  delivered,  42. 

where  instrument  is  stolen,  42. 

agreement  that  others  shall   sign,  43. 

acceptance  of,  223. 
INDORSER,  where  character  not  clear  signer  is  presumed  to  be 
an  indorser,  47-49,  50. 

usury  not  a  defense  to,  111. 

deposit  of  collateral  securities  by,  119. 

when  person  deemed  such,  122. 

may  not  be  shown  to  be  maker,  123. 

parol  evidence  to  vary  liability  of,  123-133. 

irregular  indorser,  124-127. 

partner  indorsing  firm  note,  126,  132. 

admits  capacity  of  prior  party,  129. 

liability  of  general  indorser,  129-133. 

liability  where  paper  indorsed  restrietively,  130. 


274  INDEX. 

(The  references  are  to  pages.) 

INDORSER— Continued. 

to  whom  warranty  runs,  130. 

warranty  as  to  genuineness,  131. 

of  validity,  131. 

as  to  title,  131. 

holders  knowledge  of  infirmity,  132. 

where  note  stipulates  for  attorneys  fees,  132. 

has  no  right  to  require  suit  against  maker,  133. 

liability  of  where  paper  negotiable  by  delivery,  133. 

order  in  which  indorsers  liable,  134-136. 

presentment  necessary  in  order  to  charge,  139,  248,  249. 

when  presentment  for  payment  not  necessary  to  charge, 
153. 

right  of  recourse  to,  157,  158. 

not  a  mere  surety  after  dishonor,  157,  158. 
— —    liability  where  collaterals   have  been  received,  158. 

holder  not  required  to  proceed  on  collaterals  in  order  to 
charge  indorsers,  158. 

notice  of  dishonor  must  be  given  to,  166. 

when  notice  of  dishonor  need  not  be  given  to,  190. 
—  what  will  discharge,  142-145,  195-201. 

payment  by  does  not  discharge  maker,  194. 

possession  of  paper  is  evidence  of  payment,  202. 

payment  by  second  indorser,  202. 

where  released  by  failure  to  present  bill  for  acceptance, 
227. 

liability  of  where  bill  dishonored  by  non-acceptance,  230. 

in  what  case  protest  necessary  in  order  to  charge,  231. 

liability  of  where  he  indorses  different  parts  of  a  set, 
242,  243. 

of  check  discharged  by  delay  to  present,  248,  249. 
INDORSEMENT,  meaning  of  term,  6. 

of  instrument  payable  in  the  alternative,  30. 

instrument  indorsed  in  blank  payable  to  bearer,  31. 

instrument  payable  to  order  of  drawer,  45. 

by  infant,  55. 

by  corporation,  55. 

where  written,  75. 

required  for  negotiation  of  instrument  payable  to  order, 
75,  76. 

must  be  completed  by  delivery,  74. 


INDEX.  2 1  O 

(The  references  are  to  pages.) 

INDORSEMENT— Continued. 

must  be  on  instrument,  75. 

or  on  an  allonge,  75,  76. 

burden  of  proof  as  to  signature,  76. 

by  stamp,  76. 

signature  alone  sufficient,  76. 

must  be  of  entire  instrument,  77. 

kinds  of,  77. 

special  indorsement,  77. 

indorsement  in  blank,  77. 

how  special  indorsement  converted  to  blank  indorsement, 

78. 
when  restrictive,  78,  79. 
restrictive   indorsement   prohibiting   further   negotiation, 

78,  79. 
restrictive  indorsement  constituting  indorsee  mere  agent, 

78,  79. 
restrictive  indorsement  vesting  title  in  trust,  78,  79. 
effect  of  indorsement  "  for  collection,"  78,  79. 
restrictvie  indorsement  authorizes  indorsee  to  receive  pay- 
ment, 79. 
restrictive  indorsement  authorizes  indorsee  to  bring  ac- 
tion, 79. 
restrictive   indorsement    authorizes   indorsee   to   transfer 

his  rights  as  indorsee,  80. 
effect  of  qualified  indorsement,  81,  82. 
qualified  indorsement  does  not  impair  negotiable  charac- 
ter of  the  instrument,  81. 
qualified  indorsement  does  not  throw  suspicion  on  paper, 

81. 
conditional  indorsement,  82. 
of  instrument  payable  to  bearer,  83. 
where  instrument  payable  to  two  or  more,  84. 
by  cashier,  85. 
by  fiscal  officer,  85,  86. 
where  name  misspelled,  86. 

where  payee  or  indorsee  wrongly  designated,  86. 
in  representative  capacity,  86. 
presumption  as  to  place  of,  87. 
presumption  as  to  time  of,  86,  87. 
striking  out  indorsement,  88,  89. 


276  INDEX. 

(The  references  are  to  pages.) 

INDORSEMENT— Continued. 

effect  of  striking  out  indorsement,  88,  89. 

when  may  be  done,  88,  89. 

transfer  without  indorsement,  89-92. 

rights  of  transferee,  89,  90,  91. 

prior  equities,  91,  92. 

warranty  where  negotiation  by  qualified  indorsement,  128, 

129. 
warranty  of  title  in  case  of  qualified  indorsement,  128, 

129. 
warranty  by  general  indorsement,  129-133. 
indorsement  by  executors,  132. 
INFANT,  indorsement  by,  55. 

acceptor  admits  capacity  to  draw,  121. 
INLAND  BILL,  what  is,  214. 
INSOLVENCY,  does  not  excuse  presentment,  155. 
INSTALLMENTS,  instruments  payable  in,  13,  14. 
INSTRUMENT,  meaning  of  term,  6. 

INTEREST,  Avhere  instrument  does  not  specify  date  from  which 
interest  to  run,  46-48. 
does  not  make  sum  uncertain,  13. 
ISSUE,  meaning  of  term,  6. 

JOINT  DEBTORS,  presentment  to,  152. 

JOINT  PARTIES,  two  or  more  persons  signing  "  I  promise  to 
pay,"  47. 

joint  payees  indorsing,  136. 

suit  against  joint  indorser,  136. 
JUDICIAL  NOTICE,  enactment  in  other  states,  5. 
JUDGMENT  NOTES,  23-25. 

LAW  MERCHANT,  when  governs,  8. 

LIABILITY,  no  one  liable  whose  signature  not  on  instrument,  32. 

of  person  signing  as  agent,  52-55. 

of  maker,  118. 

of  drawer,  119. 

of  acceptor,  120-122. 

of  irregular  indorser,  124-127. 

where  paper  negotiated  by  delivery  only,  127-129. 

where  paper  negotiated  by  qualified  indorsement,  127-129. 

of  general  indorser,  129-133. 


INDEX.  277 

(The  references  are  to  pages.) 

LIABILITY— Continued. 

of  indorser  where  paper  negotiable  by  delivery,  134. 

order  in  which  indorsers  liable,  134. 

of  agent  or  broker,  136,  137. 
LIF;N,  person  having  is  holder  for  value,  63-65. 

extent  of  recovery  by  holder  having  lien,  64,  65. 

holder  having  a  lien  may  sue  on  instrument,  65. 

holder  may  recover  on  instrument  though  principal  debt 
not  due,  65. 
LIGHTNING  RODS,  notes  given  for,  111. 
LUNATIC,  acceptor  cannot  show  drawer  a  lunatic,  122. 

MAIL,  miscarriage   in,   does   not   invalidate   notice   of   dishonor, 

179. 
MAKER,  note  payable  after  death  of,  21. 

indorser  may  not  be  shown  to  be,  123. 

instrument  payable  to  order  of,  30,  245,  246. 

liability  of,  118. 

admission  of,  118. 

demand  of  payment  not  necessary  to  charge,  139. 

liability  to  holder  where  part  payment  made  by  indorser, 
194. 
MARGINAL  FIGURES,  effect  of,  47. 

MARRIED  WOMAN,  acceptor  admits  capacity  of  to  draw  bill, 
121. 

liability  of  on  commercial  paper,  87,  105. 
MATURITY,  option  to  pay  before,  20,  21. 

mode  of  indicating,  20. 

time  of,  158-160. 
MONEY,  instrument  payable  in  particular  kind  of,  28. 
MORTGAGE  NOTES,  23. 
MUNICIPAL  BONDS,  statute  applies  to,  3. 

NEGOTIABLE  INSTRUMENTS,  law  is  confined  to,  2,  3. 
"  instrument  "  means  negotiable  instrument,  6. 
must    contain   unconditional   promise,   11. 
must  be  for  payment  of  sum  certain,  11. 
must  be  for  payment  of  money  only,  11. 
must  be  in  writing,  11. 
must  be  signed  by  maker  or  drawer,  11. 


278  INDEX. 

(The  references  are  to  pages.) 

NEGOTIABLE  INSTRUMENTS— Continued. 

must  be  payable  on  demand  or  at  determinable  future 
time,  11. 

must  be  payable  to  order  or  bearer,  11. 

form  of,  11. 

statement  of  transaction  does  not  affect  negotiable  char- 
acter, 16. 

indication  of  particular  fund  does  not  render  non-nego- 
tiable, 16. 

order  to  pay  out  of  particular  fund  not  negotiable,  16-19. 

instrument  payable  on  contingency  not  negotiable,  20-22. 

provision  for  sale  of  collateral,  22,  23-25. 

provision  for  confession   of  judgment,  23-25. 

waiver  of  benefits   of  law,  23. 

option  to  require  something  in  lieu  of  payment  in  money, 
23-26. 

instrument  payable  when  certain  person  shall  become  of 
age,  21. 

omissions  not  affecting,  26-28. 

not  dated,  26. 

not  specifying  value  given,  26. 

not  specifying  place  where  drawn,  26. 

not  specifying  place  where  payable,  26. 

bearing  seal,  26. 

provisions  as  to  collaterals,  22,  23-25. 

designation  of  particular  kind  of  current  money,  26-28. 

instrument  continues  negotiable  until  discharged  or  re- 
strictively  indorsed,  88. 
NEGOTIABLE  INSTRUMENTS  LAW,  short  title,  2. 

construction  of,  3. 

when  to  take  effect,  259. 

to  what  instruments  it  applies,  2,  3. 

judicial  notice  of,  5. 

must  be  proved,  5. 
NEGOTIATION  of  post-dated  instruments,  35,  36,  107. 

rules  governing,  73-93. 

what  constitutes  negotiation,  73-75. 

of  instrument  payable  to  bearer,  74. 

of  instrument  payable  to  order,  74,  75. 

when  prior  party  may  negotiate,  92. 


INDEX.  279 

(The  references  are  to  pages.) 

NEGOTIATION— Continued. 

of  paper  payable  to  bearer  and  indorsed  specially,  134. 

party   secondarily   liable   paying   instrument   may   again 
negotiate  it,  202-204. 

when  drawer  and  indorsers  released  by  delay  in  nego- 
tiating bill,  227. 

bill  must  be  negotiated  within  reasonable  time,  payable 
on  demand,  141-145,  227. 

of  bills  in  sets,  242. 
NEW  YORK  STATE  BILLS,  note  payable  in,  28. 
NON-NEGOTIABLE  INSTRUMENT,  presumption  as  to  considera- 
tion, 60. 
NOTARY  PUBLIC,  may  make  protest,  234. 

not  disqualified  because  officer  of  bank,  234. 

presentment  must  be  by  notary  in  person,  234. 

certificate  of  as  evidence,  233,  234. 
NOTE,  meaning  of  term,  6. 

NOTICE  OE  DISHONOR,  where  instrument  issued  or  negotiated 
when  overdue,  29. 

waiver  of  presentment  not  sufficient,  157. 

need  not  be  given  to  maker  for  accommodation,  160. 

to  whom  must  be  given,  166. 

rules  governing,  165,  192. 

must  be  given  to  indorser,  166. 
•         must  be  given  to  drawer,  166. 

to  officers  of  corporation  indorsing  for  accommodation,  166. 

where  indorser  is  officer  of  bank,  166. 

need  not  be  given  to  guarantor,  167. 

by  whom  may  be  given,  167,  168. 

notice  by  stranger  not  sufficient,  168. 

party  discharged  cannot  give,  168. 

drawee  who  refuses  acceptance  cannot  give,  168. 

notice  by  agent,  168,  169. 

bank  as  agent  may  give,  168. 

maker  as  agent  of  holder,  168. 

notary  acts  as  agent  of  holder,  168. 

to  whose  benefit  notice  enures,  169-181. 

holder  required  to  give  notice  only  to  his  immediate  in- 
dorser, 169. 

notice  given  on  behalf  of  wrong  person,  169. 

when  misdescription  does  not  vitiate,  170. 


280  INDEX. 

(The  references  are  to  pages.) 

NOTICE  OF  DISHONOR— Continued, 
when  notice   sufficient,  170. 
notice  need  not  be  signed,  170. 
omission  of  date  and  time  of  payment,  171. 
printing  notice,  171. 
signature  of  notary,  171. 
form  of  notice,  170-172. 
when   notice   defective,  171-172. 
may  be  delivered  personally,  172. 
may  be  sent  by  mail,  173. 
effect  of  notary's  certificate,  173. 
notice  over  telephone,  173. 

when  sufficiency  of  notice  question  of  law,  172. 
may  be  given  to  agent,  174. 
in  Kentucky  written  notice  required,  174. 

who  deemed  agent  to  receive,  174. 

where  party  dead,  174,  175. 

to  partners,  174. 

to  joint  parties  not  partners,  175. 

to  bankrupt,  175,  176. 

to  assignor  for  creditors,  175,  176. 

may  be  given  as  soon  as  instrument  dishonored,  176. 

where  parties  reside  in  same  place,  176,  177. 

where  parties  reside  in  different  places,  177-179. 

by  what  mail  to  be  sent,  178. 

where  not  sent  by  mail,  179. 

miscarriage  in  mails  does  not  impair  validity  of  notice, 
179. 

when  notice  deemed  deposited  in  post-office,  180. 

miscarriage   caused   by   insufficient   postage,   180. 

presumption  as  to  delivery,  180. 

proof  of  deposit  in  post-office,  180. 

time  in  which  indorser  to  give  notice  to  prior  parties,  180. 

bank  need  give  only  to  its  customer,  181. 

degree  of  diligence  required,  181. 

where  indorser  liable  for  only  part  of  debt,  181. 

where   notice   to   be   sent,   182-184. 

when  party  adds  address  to  signature,  182. 

where  party  has  not  given  address,  182. 
where  he  lives  in  one  place  and  has  office  in  another,  182, 
183. 


INDEX.  281 

(The  references  are  to  pages.) 

NOTICE  OF  DISHONOR— Continued. 

where  he  is  sojourning  in  another  place,  182,  183. 

notice  actually  received  is  sufficient,  182. 

waiver,  184. 

waiver  of  before   dishonor,  184. 

waiver  of  after  dishonor,  184. 

what  will  constitute  waiver,  184. 

evidence  of  waiver,  185. 

waiver  embodied  in  instrument,  186. 

waiver  written  over  signature,  186. 

waiver  of  protest,  what  it  includes,  186,  187. 

when  notice   dispensed  with,   187-189. 

when  cannot  be  given  after  reasonable  diligence,  187. 

what  will  constitute  reasonable  diligence,  188,  189. 

when  delay  excused,  189. 

reliance  upon  directory,  188. 

duty  to  inform  notary,  188. 

where  pricipal  obligor  is  dead,  188. 

when  notice  need  not  be  given  to  drawer,  189. 

duty  to  apply  for  information,  189. 

when  question  of  diligence  one  of  law,  189. 

when  notice  need  not  be  given  to  indorser,  190. 

when  instrument  has  been  previously  dishonored  by  non- 
acceptance,  191. 

effect   of  omission  to   give   notice   of  dishonor  by  non- 
acceptance,  188. 
NOTICE  OF  EQUITIES,  what  constitutes,  102-107. 

See  "  Promissory  Note." 
NOTICE,  where  transferee  receives  notice  before  payment  in  full 

for  instrument,  100. 
NOTING,  235. 

OMISSIONS,  what  omissions  do  not  affect  validity  or  negotiable 

character  of  instrument,  26-28. 
ON  OR  BEFORE  SPECIFIED  DATE,  instrument  so  payable,  20. 
OPTION,  to  pay  before  maturity,  20-21. 

of  holder  to  require   something  in  lieu   of  payment   in 

money,  26. 
of  holder  to  declare  note  due,  23,  24,  26. 
ORDER,  instrument  must  be  payable  to,  or  bearer,  11, 12,  30. 

instrument  payable  to  particular  person  without  more,  27. 


282  INDEX. 

(The  references  are  to  pages.) 

ORDER— Continued. 

instrument   payable    to,   30. 

instrument  payable  to  order  of  drawer,  30. 

instrument  payable  to  order  of  maker,  30. 

instrument  payable  to  order  of  drawee,  30. 

instrument  payable  to  order  of  two  or  more  payees,  30. 

instrument  payable  to  order  of  one  of  several  payees,  30. 

instrument  payable  to  order  of  holder  of  office,  30. 

payee  must  be  named  or  indicated,  30. 
OVERDUE  INSTRUMENT  is  as  regards  parties  issuing  or  nego- 
tiating it  payable  on  demand,  28,  29. 

PAROL  EVIDENCE,  to  show  date,  27. 

to  vary  status  of  person  signing  instrument,  123. 

as  to  agreement  among  indorsers,  127,  135,  136. 

to  show  order  in  which  indorsers  liable,  127. 

to  vary  liability  of  indorser,  133. 

to  show  order  in  which  indorsers  are  liable,  136. 

to  show  liability  of  drawer,  136. 
PARTICULAR  FUND,  payment  out  of,  19. 
PARTNERS,   indorsing   individually,   123. 

indorsing  firm  note,  126,  132. 

presentment  to,  152. 

notice  of  dishonor  to,  175. 
PATENT  RIGHTS,  negotiable  instruments  given  for,  256. 
PAYEES,  two  or  more,  30. 

one   of   several,   30. 

when  name  not  the  name  of  any  person,  30. 

how  payee  may  be  designated,  31. 

as  holder  in  due  course,  41,  42,  96. 

acceptance  admits  existence  of,  120. 

acceptance  admits  capacity  to  indorse,  120,  122. 

acceptance  does  not  admit  signature  of,  121. 
PAYMENT,  instrument  must  be  for  payment  in  money,  11. 

instrument  payable  in  merchandise,  12. 

option  to  require  something  in  lieu  of  payment  in  money, 
23-26. 

what  constitutes  payment  in  due  course,  162-164. 

authority  to  receive,  163. 

by  principal  debtor,  193. 

by  party  accommodated,  193. 

by  stranger,  194. 


INDEX.  283 

(The  references  are  to  pages.) 

PAYMENT— Continued. 

effect  of  payment  by  indorser,  194. 

by  one  of  the  makers  discharges  instrument,  195. 

through  clearing-house,  195. 

by  party  secondarily  liable,  202,  204. 

what  bills  must  be  protested  for  non-payment,  231. 

bill  protested  for  non-acceptance  may  be  protested  for 
non-payment,  235. 

of  bills  in  a  set,  243. 
PAYMENT  FOR  HONOR,  who  may  make,  240. 

how  made,  240. 

preference  of  parties  offering  to  pay  for  honor,  241. 

effect  on  subsequent  parties,  241. 

where  holder  refuses  to  receive  payment,  241. 

effect  of,  241. 

declaration  before  payment,  241. 

rights  of  payer  for  honor,  241. 
"  PEDDLER'S  NOTE,"  consideration  required  to  be  stated  in, 

109-111. 
PENCIL,  writing  may  be  in,  11. 
PERSON,  meaning  of  term,  6. 
PERSON  PRIMARILY  LIABLE,  who  is,  6. 

demand  of  payment  not  necessary  to  charge,  139. 

accommodation  maker  is,  200,  201. 
PERSON  SECONDARILY  LIABLE,  who  is,  6. 

right  of  recourse  to,  157. 
PLACE,  failure  to   specify  place   where   drawn  does  not  affect 
negotiable  character,  26. 

presumption  as  to  place  of  indorsement,  87. 

of  presentment,  what  is  proper  place,  147,  148. 

where  payable  at  a  branch  bank,  147. 

alteration  as  to  place,  209,  210. 
PLEADING,  presentment  in  reasonable  time,  143,  144. 

in  case  of  irregular  indorser,  127. 

that  paper  not  presented  within  reasonable  time,  144. 

waiver  of  presentment,  157. 

in  case  of  alteration,  208. 

defense  to  action  for  payment  of  forged  check,  255. 
POST-DATED  INSTRUMENT,  negotiation  of,  35. 

instrument  not  invalid  because  post-dated,  35. 

is  negotiable,  35. 


284  INDEX. 

(The  references  are  to  pages.) 

POST-OFFICE,  what  constitutes  deposit  in,  180. 

deposit  in  post-office  box,  180. 
PRE-EXISTING  DEBT  constitutes  value,  60,  61,  62,  63,  64. 
PRESENTATION,  instrument  payable  on  is  payable  on  demand, 

28. 
PRESENTMENT  FOR  ACCEPTANCE,  in  what  cases  necessary, 
226. 
where  bill  payable  after  sight,  226. 
where  required  to  fix  maturity,  226. 
not  necessary  where  payable  at  day  certain  or  at  fixed 

time  after  date,  226. 
right  of  holder  to  present  bill  for  acceptance,  226. 
where  bill  expressly  stipulates  for,  226. 
where  bill  not  payable  at  drawee's  place  of  business  or 

residence,  226. 
when  drawer  and  indorsers  released,  227. 
duty  of  agent  to  present  bill  for  acceptance,  226. 
how  presentment  made,  227. 
must  be  by  or  on  behalf  of  holder,  227. 
must  be  at  reasonable  hour,  227. 
must  be  on  business  day,  227. 
before  bill  is  due,  227. 
must  be  to  drawee  or  some  person  authorized  to  act  for 

him,  228. 
where  there  are  two  or  more  payees  not  partners,  228. 
where  drawee  is  dead,  228. 
where  drawee  is  bankrupt  or  insolvent,  228. 
on  what  days  may  be  made,  228. 
where  time  insufficient,  229. 
when  excused,  229. 
excused  where  drawee  dead,  229. 
excused  where  drawee  has  absconded,  229. 
excused  where  drawee  is  fictitious  person,  229. 
excused  where  drawee  has  not  capacity  to  contract,  229. 
excused  when  cannot  be  made  after  reasonable  diligence, 
229. 
PRESENTMENT  FOR  PAYMENT,  of  instrument  issued  or  nego- 
tiated when  overdue,  29. 
necessary  in  order  to  charge  drawer  or  indorsers,  139. 
not  necessary  to  charge  party  primarily  liable,  139. 
where  instrument  payable  on  demand,  141-145. 


INDEX.  285 

(The  references  are  to  pages.) 

PRESENTMENT  FOR  PAYMENT— Continued, 
by  what  laws  determined,  140. 
what  constitutes  sufficient  presentment,  145,  146. 
must  be  made  on  day  of  maturity,  141. 
holder  has  entire  day  in  which  to  make,  146. 
place  of  presentment,  147,  148. 
where  principal  debtor  dead,  152. 

where  maker  or  acceptor  has  abandoned  place  of  busi- 
ness, 148. 
where  instrument  payable  at  bank,  150,  151. 
collaterals  must  be  tendered  with  instrument,  149. 
instrument  must  be  exihibited,  148. 
what  will  excuse  exhibition,  149. 
where  persons  primarily  liable  are  partners,  152. 
to  joint  parties  who  are  not  partners,  152. 
when   not   required   to   charge   indorser,   130. 
when  not  required  to  charge  drawer,  130. 
when  delay  excused,  154. 
waiver  of,  153,  155,  156. 
what  will  amount  to  waiver,  155,  156. 
where  drawee  is  fictitious  person,  155. 
effect  of  failure  where  instrument  payable  at  a  particu- 
lar place,  140. 
necessity  for  where  holder  has  election,  140. 
where  indorser  holds  security,  141. 
where  no  place  of  payment  indicated,  147. 
where  person  to  make  payment  has  removed,  148. 
demand  over  telephone,  149. 
informal  request,  149. 
to  persons  liable  as  partners,  152. 
when  dispensed  with,  155-157. 
waiver  of  notice  of  dishonor  not  sufficient,  157. 
computation  of  time,  160. 
instrument  falling   due   on   Sunday,  158-160. 
instrument  falling  due  on  holiday,  158-160. 
instrument  falling  due  on  Saturday,  158-160. 
not  necessary  where  bill  has  been   dishonored  by  non- 
acceptance,  230. 

how  made  to  acceptor  for  honor,  239. 
within  what  time  check  must  be  presented,  248-251. 
effect  of  delay,  248-251. 


286  INDEX. 

(The  references  are  to  pages.) 

PRIMARILY  LIABLE,  meaning  of  term,  6,  7. 
PRINCIPAL  not  liable  unless  his  signature  appears  on  instru- 
ment, 51. 
PRINTED  PROVISIONS,  written  provisions  prevail  over,  46-48. 
"  PROCURATION,"  signature  by,  40. 
PROMISSORY  NOTE,  meaning  of  term,  6. 

note  given  for  purchase  price  of  goods,  17,  18. 

payable  on  or  after  death  of  maker,  21. 

payable  in  gold  coin,  28. 

in  bank  bills,  28. 

in  New  York  State  bills,  28. 

in  Florida  funds,  28. 

in  specie,  28. 

given  for  patent  right,  28. 

tl  Bohemian  oats  "  notes,  28. 

ambiguous  instrument  may  be  considered  bill  or  note,  47. 

non-negotiable  notes,  2,  59,  60,  61. 

given  for  a  stallion,  111,  258. 

given  for  lightning  rods,  111,  258. 

peddler's  note,  111. 

usurious  notes,  108-111. 

given  for  gambling  debt,  108-111. 

when  bill  may  be  treated  as,  214. 

drawn  to  maker's  own  order,  245,  246. 

denned,  245. 
PROTEST,  what  waiver  of  includes,  186. 

construction  of  term,  184. 

construction  of  term  in  pleading,  187. 

may  be  made  in  case  of  dishonor  of  any  instrument,  192. 

not  required  except  in  case  of  foreign  bills,  192,  231. 

necessary  in  case  of  foreign  bills,  192,  231. 

unnecessary  unless  bill  appears  on  its  face  to  be  a  foreign 
bill,  231. 

how  made,  232,  233. 

must  be  annexed  to  bill,  232. 

must  be  under  hand  of  notary,  232. 

must  be  under  seal  of  notary,  232 

when  to  be  made,  235. 

must  specify  time  and  place  of  presentment,  232. 

must  specify  fact  that  presentment  was  made,  232. 


INDEX.  287 

(The  references  are  to  pages.) 

PROTEST— Continued. 

cause  for  protesting  the  bill,  232. 

demand  made  and  answer  given,  232. 

manner  of  presentment,  232. 

may  be  made  by  notary  public,  234. 

may  be  made  by  resident,  234. 

presentment  must  be  by  notary  himself,  234. 

where  made,  235. 

when  dispensed  with,  236. 

for  better  security,  236. 

both  for  non-acceptance  and  non-payment,  235. 

extending  protest,  235. 

before  maturity  where  acceptor  insolvent,  236. 

where  bill  is  lost,  236. 

of  bill  accepted  for  honor,  239. 

REASONABLE  DILIGENCE.     See  Due  Diligence. 
REASONABLE  HOUR,  what  is,  146. 
REASONABLE  TIME,  what  constitutes,  7. 

when  question  of  law,  7. 

when  question  of  fact,  7. 

in  case  of  instrument  payable  on  demand,  100. 

instrument  payable  on  demand  must  be  presented  within, 
142-145. 

where  check  is  negotiated,  144. 

for  presentment  of  check,  248,  249,  250. 
REFEREE  IN  CASE  OF  NEED,  215. 
RENUNCIATION,  effect  of,  204. 

how  made,  204. 
REPEAL,  laws  repealed,  259. 

REPRESENTATIVE  CAPACITY,  person  indorsing  in  may  nega- 
tive personal  liability,  86. 

SATURDAY,  instrument  falling  due  on,  158-160. 
SEAL  does  not  affect  negotiable  character,  26,  27. 

of  corporation,  26,  27. 
SECONDARILY  LIABLE,  meaning  of  term,  6,  7. 
SHORT  TITLE  of  negotiable  instruments  law,  2. 
SIGHT,  instrument  payable  at  sight  is  payable  on  demand,  28,  29. 


288  INDEX. 

(The  references  are  to  pages.) 

SIGNATURE,  no  person  liable  whose  signature  does  not  appear 
on  the  instrument,  50,  51. 

proof  of,  12. 

where  two  or  more  sign  in  the  singular,  50. 

by  agent,  51. 

in  trade  or  assumed  name,  51. 

by  "  procuration,"  55. 

forged  signature,  56. 

acceptance  admits  genuineness  of  drawer's  signature,  120. 
SPECIE,  note  payable  in,  28. 
STALLIONS,  notes  given  for,  111,  258. 
STATEMENT  OF  TRANSACTION,  effect  of,  16, 17. 
STATUTES,  prior  repealed,  9. 
STOLEN  INSTRUMENT,  where  incomplete,  42. 

holder  in  due  course  may  recover  on,  107. 

presumption  where  instrument  is  stolen,  117. 
STRIKING  OUT  INDORSEMENT,  effect  of,  78,  79. 

when  may  be  done,  78,  79. 
SUM  CERTAIN,  what  is,  13. 
SUNDAY,  when  day  for  doing  act  falls  on,  5. 

instrument  falling  due  on,  158-160. 
"  SUNDRIES,"  instrument  payable  to,  34. 

TELEPHONE,  demand  of  payment  over,  149. 

TENDER,  ability  and  willingness  at  place  of  payment  equal  to, 

139. 
TERMS,  when  sufficient,  34. 
TIME,  how  computed,  160. 

when  statute  to  take  effect,  8,  259. 

of  indorsement,  86,  87. 
TITLE,  short  title  of  act,  2. 

possession  is  proof  of,  46. 

when  defective,  101,  102. 

burden  of  proof  where  title  of  prior  party  defective,  115. 

warranty  of  where  negotiation  by  delivery,  127-129. 

warranty  of  where  negotiation  by  qualified  indorsement, 
127-129. 

warranty  of  by  general  indorser,  129-131. 
TRADE  NAME,  persons  signing  it,  51. 
TRAVELER'S  CHECKS,  forged  indorsement,  58. 


INDEX.  289 

(The  references  are  to  pages.) 

UNCONDITIONAL  PROMISE  OR  ORDER,  what  is,  16,  17. 
order  to  pay  out  of  particular  fund  is  not,  16,  17. 
UNIFORMITY,  statute  construed  so  as  to  produce,  3-5. 
USAGE,  regard  to  be  had  to  in  determining  question  of  reason- 
able time,  7. 
bank  custom,  150,  151. 
USURY,  no  implied  warranty  that  note  is  not  void  for  usury,  128, 
129. 
note  given  for  usurious  loan,  108-111. 

VALUE,  meaning  of  term,  6. 

failure  to  specify  does  not  affect  negotiable  character  of 

instrument,  26,  27. 
what  constitutes,  60-62. 
pre-existing  debt  is,  60-62. 
what   constitutes   holder  for  value,   62,  63. 
lien  on  instrument  constitutes,  63-65. 
discount  by  bank,  97. 

WAIVER  of  benefits  of  law  by  obligor,  23. 

of  presentment  for  payment,  155-157. 

what  will  amount  to  waiver  of  presentment  for  payment, 
155, 156. 

pleading  waiver,  157. 

of  notice  of  dishonor,  184,  185. 

when  embodied  in  instrument,  186. 

when  written  above  signature,  186. 

of  protest,  what  it  includes,  186,  187. 

extent  of,  187. 
WARRANTY,  where  negotiation  by  delivery,  128,  129. 

breach  of  does  not  require  proof  of  good  faith,  117. 

express  warranty,  128. 

where  negotiation  by  qualified  indorsement,  128,  129. 

of  genuineness,  128-131. 

of  validity,  128. 

in  case  of  instrument  indorsed  "  for  collection,"  128,  129. 

no  implied  warranty  that  note  is  not  void  for  usury,  128, 
129. 

no  implied  warranty  of  capacity  to  contract  on  sale  of 
municipal  bonds,  128,  129. 

when  warranty  of  genuineness  not  implied,  128. 


290  INDEX. 

(The  references  are  to  pages.) 

WARRANTY— Continued. 

of  capacity  of  prior  parties  where  negotiation  by  delivery 

or  qualified  indorsement,  129. 
general  indorser  warrants,  that  instrument  is  genuine,  129- 

133. 
in  case  of  public  or  corporate  securities,  129. 
general  indorser  warrants,  that  instrument  is  what  it  pur- 
ports to  be,  129-133. 
that  he  has  a  good  title,  129- 

133. 
that  prior  parties  had  capac- 
ity to  contract,  129-133. 
that  instrument  is  valid  and 
subsisting,  129-133. 
to  whom  warranty  runs,  130. 
in  case  of  certificate  of  deposit,  132. 
knowledge  of  holder,  132. 
"  WITHOUT  DEFALCATION,"  words  have  no  force,  13. 
"  WITHOUT  RECOURSE,"  effect  of  term,  81. 
does  not  impair  negotiable  character,  81. 
is  not  evidence  of  any  defect  of  title,  106,  107. 
WRITING  may  be  in  pencil,  11. 

negotiable  instrument  must  be  in,  11. 
WRITTEN,  what  included  in  term,  6. 
WRITTEN  PROVISIONS  prevail  over  printed,  46. 


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